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house Bill H.R. 1105

Attention Heirs: Repealing the Death Tax and the Generation-Skipping Transfer Tax

Argument in favor

Why should death or gifts from grandparents to their grandchildren be taxable events? These people already paid taxes on that money when they first earned it, taxing it again at a person’s death is not only insulting, it's double-taxation.

Cary's Opinion
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04/17/2015
You know what? I paid this tax bill already. Why should I have to pay again just because I died?
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Jay's Opinion
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04/16/2015
The government already got their cut. Leave inheritances alone!
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JonRunyan's Opinion
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04/16/2015
What about farmers who have to sell to pay the death tax?
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Argument opposed

The people who pay these taxes are the wealthiest in the country — they can afford it. Not to mention, the tax only applies to about 2 of every 1,000 estates. The government does not need to be giving the Paris Hiltons of the world a $269 billion gift.

Jeff's Opinion
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04/16/2015
Passing wealth freely from generation to generation is the cornerstone of an oligarchical system. It is an income for the beneficiaries, and so it is taxable.
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Christopher's Opinion
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04/16/2015
Most Americans will never have to pay this tax. This tax was created to prevent the staggering accumulation of wealth necessary for an aristocracy to take root. As a country that prides itself on reaching for equality, we should definitely NOT repeal this tax.
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Mike's Opinion
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04/15/2015
This was instilled to prevent "royalty". This land is for all of us not just the wealthy and powerful.
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    You know what? I paid this tax bill already. Why should I have to pay again just because I died?
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    Passing wealth freely from generation to generation is the cornerstone of an oligarchical system. It is an income for the beneficiaries, and so it is taxable.
    Like (46)
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    Most Americans will never have to pay this tax. This tax was created to prevent the staggering accumulation of wealth necessary for an aristocracy to take root. As a country that prides itself on reaching for equality, we should definitely NOT repeal this tax.
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    This was instilled to prevent "royalty". This land is for all of us not just the wealthy and powerful.
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    Currently the death tax only affects inheritance beyond $5M. 99% of americans, benefit from this tax, and the super rich still get to pass down $5M of their estate without taxes. This country needs to tax the rich if t is ever going to level the playing field.
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    The government already got their cut. Leave inheritances alone!
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    Death of a family member is painful as it is, so to tax people for something the deceased wanted them to have is ridiculous.
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    What about farmers who have to sell to pay the death tax?
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    America was founded on the principle of not having a landed gentry and a free exchange of property (see Tocqueville).
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    Obama Estate Tax Plan: Die Once, Get Taxed Twice By Stephen Moore President Obama's proposed changes to inheritance and capital gains taxes could raise the estate tax rate in the U.S. to the highest in the industrialized world. The plan, announced during the State of the Union address, would eliminate what is called "step-up basis at death" on capital gains taxation. And the top capital gains rate would jump to 28% from 20%. Under current law, when a parent or grandparent dies, the increase in the valuation of his or her asset from when it was originally purchased is not taxed. This is to offset the effects of the estate tax. Obama's plan would tax estates and impose the regular capital gains tax on inherited assets — a business, property or stocks. This could bring the effective death tax rate to 57%, according to Dick Patten, chairman of the American Business Defense Council. Including state inheritance taxes, the rate would average 65% but could go as high as 68%. Of 38 industrialized countries tracked by Ernst & Young, only Belgium would have a higher death tax, at 80%. But Belgium provides a lower 60% rate to immediate family members. Add in state estate taxes, and the U.S. would have the highest rate in the world. At least a dozen nations, including Sweden, Russia and China, impose no death tax at all. The Obama proposal would raise about $200 billion over the next decade, according to White House projections. Spouses would not have to pay the tax, but other family members, including children, would. 'Dagger' For Family Firms "The Obama plan is effectively a dagger in the heart of family-owned businesses," said Patten, who is leading an effort in Congress to eliminate the death tax altogether. "If the tax were to ever get this high, most family businesses would have to be sold at the time of death in order to pay the taxes owed. This seems almost un-American." In many plans to eliminate the estate tax entirely, the step-up basis at death on capital gains would go away. So heirs would have to pay only the capital gains tax rate (now 23.8%) on the increase in the valuation of an asset once it is sold. What makes the Obama plan shocking to estate-tax planners is that he would tax the estates as capital gains and as an inheritance — a double-tax whammy. Making matters worse, the new plan to soak the rich would continue to raise the capital gains tax. When he entered office, it was 15%. He imposed an income-tax surcharge of 3.8% to help pay for ObamaCare. Then he raised the rate an additional five percentage points as part of his tax increase on the rich in 2012. Obama has proposed raising that 23.8% rate to 28% — the highest since the late 1980s and nearly double the rate when he entered office. Not Just The 1% Obama has been trying to sell the plan on rich-vs.-poor rhetoric. The White House fact sheet on the plan begins by saying: "Our tax system has changed over time in ways that make it easier for the wealthy to avoid paying their fair share." The administration calls the step-up basis at death policy on capital gains "perhaps the single largest loophole in the entire individual income-tax code." What the White House has not acknowledged is that under its proposal to end the "trust fund loophole," hundreds of thousands of families with small or midsize estates would get hammered with the Obama death tax, according to estate tax planners. Under current law, estates of less than $5 million are exempt from estate taxation. Under Obama's plan, the new capital gains tax on inherited assets would exempt only the first $200,000 of inherited assets for a married couple and only $100,000 for singles. Take a daughter who inherits from her deceased father a family home worth $1 million. If she sells the home, and it has risen in value by, say, $500,000 from its original purchase price, the first $250,000 of gain is tax-free. But the woman would have to pay a 28% tax on the rest of the $250,000 net gain. She would have to write a check to the IRS for about $70,000, whether she is rich or not. This means that many estates with an asset appreciation valuation of $250,000 to $5 million that are not currently subject to tax now could be. "So much for only taxing millionaires and billionaires," said Grover Norquist, president of Americans for Tax Reform. "This looks like yet another Obama tax lie." For those who are rich, the combined estate and capital gains tax for major estates could reach more than 60%. "This isn't fair," Patten said, "because remember, the income was already taxed when it was originally earned." Steve Forbes of Forbes magazine calls the estate tax "an indefensible double tax on family businesses. It runs contrary to the American ideal." Meanwhile, Republicans in Congress are moving ahead aggressively with a plan to eliminate the estate tax altogether. "This is Obama's way to try to head off our estate-tax repeal legislation," said one GOP staffer on Capitol Hill. "But we are very close to having the votes in the House and Senate now to get rid of this hated tax." Republicans point to a 2012 study by the Joint Economic Committee that found "the estate tax has reduced the amount of capital stock in the U.S. economy by roughly $1.1 trillion since its introduction as a permanent tax in 1916." It also concluded the tax "is an overwhelming cause of the dissolution of family businesses. The estate tax is a significant hindrance to entrepreneurial activity because many family businesses lack sufficient liquid assets to pay estate tax liabilities." The issue and coming battle over the estate tax highlights the deep ideological divide between the Republican Congress and the Obama White House: The GOP wants to get rid of the death tax; the president wants to nearly double it. - Moore is chief economist with the Heritage Foundation. About the Author Stephen Moore Distinguished Visiting Fellow Project for Economic Growth Originally appeared in Investor's Business Daily. http://www.heritage.org/research/commentary/2015/2/obama-estate-tax-plan-die-once-get-taxed-twice
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    My parents are small business owners and if they died we would have to pay this tax. They are NOT wealthy! They have already paid taxes at a very high rate on everything they sell so why is it ok to make me pay another tax because they die???!!! You assume everyone has the money if they own their business but they don't.
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    Get the heck out of here. This isint a tax to the general population of "grandparents and estate holders." You need to be part of the top .2 percent of Americans to even qualify for this tax. It's a tax that correctly applies to the very few families of extreme wealth. It's a good thing. It gives back to the services we all enjoy, and it is fair.
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    The death tax is the death of family farms.
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    This only applies to people passing on more than $10million. So yea, they can afford it :)
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    That wealthy people are able to hand down their inherited, or illegally or amorally, or hard-earned money through lack of an inheritance tax is NO reason to forbid it to those of us who, through hard work and scrimping and saving, want to help out our children! I cannot do anything about wealthy people using tax laws that offend others who might be jealous, nor do I want to do so. Don't have a law that will penalize me for wanting to do the same. MY money from MY work should go to whomever I deem will get it; and that is NOT any level of government that did NOTHING to earn MY money. The federal government even taxes us on taxes. Social Security is a tax we must pay and when we claim our legal right to get our money out of it, we are taxed again! It is (a)NOT a gift to us, (b) NOT an investment, (c) NOT savings plan. If it were any of these: (a) we would NOT BE paying for a gift, (b) WE who are the investors would get the money and it would NOT go to any others, including non-citizens and illegals, (c) WE who put away our money into savings would get it back with interest, and (d) we could NOT be forced to pay into it. Thus, SS is a tax.
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    WE are already taxed enough and besides taxes were already taxed.
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    It's kinda messed up that dying should cause a hefty tax to be placed on your family.
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    The death tax is merely another means for the federal government to marginalize the wealthy and siphon their money. It must be repealed!
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    It's your money. It has already been taxed once so it should not be taxed anymore. Even when given.
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    The death tax applies to almost none of us middle class people. You'd have to be pretty damn wealthy to qualify for this tax.
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