As it exists today, I detest the estate tax. I had rather it go the way of the dodo.
My objection to the estate tax's extancy derives from (Ordered list for reference ease, not for prioritization):
- Governments receiving estate tax proceeds.
- The tax's having no underlying exchange transaction as its impetus.
- The tax's creating industries -- estate planning and trust management -- and forms of organization (trusts) that, IMO, shouldn't need to exist.
- The tax applies only to the heirs of people who did adroitly the one thing we're all expected to do: maximize the profitable deployment of one's resources.
- One's estate is much like life insurance proceeds, the substantive difference being that the insurer is the decedent rather than a third party. Just as life insurance proceeds aren't taxable, neither should be one's passed on estate.
One:
Were the rate of the tax sufficiently low, I could
perhaps be brought to acquiesce to its persistence were it that qualified
509(a)(1) public charities of decedents' designation the recipients of the gross tax proceeds. The government already taxed the money one earned while it was alive; thus it already got its share of your "pie," if you will. The estate tax is little other than the vulturous government take more.
Two:
Typically, governments levy taxes on behavior arising from an exchange transaction, a sale of goods or services. Incomes taxes arise from the willful sale of labor, sales taxes arise from the willful sale of goods and sometimes labor. Each transaction is agreed upon because the parties to it believe they will obtain
utility from having done so. The estate tax, however, arises from no such exchange of resources undertaken to provide utility to the parties to the exchange, but rather on account of one's merely dying.
Three:
It pisses me off that the tax code has provisions that, by their very existence, give rise to industries that exists solely for and makes profit from devising ways to avoid the provisions of the tax code itself. Yet that's exactly what the estate planning industry does and the estate tax is the only reason that line of services exists. People who are bright enough to devise ways to avail their clients of ways to skirt the tax code are bright enough to do a number of productive things that produce value; thus I'm not concerned that they cannot perform other sufficiently remunerative work.
(The estate tax planning and trust management industries aren't the only ones about which I feel this way -- I feel no differently about tax law and tax accounting. It just so happens that we're here addressing estate taxes, so I've noted that aspect of the tax minimization industry.)
Four:
The estate tax essentially makes one's heirs pay for having known someone who demonstrated an adroitness at doing the primary things America is "all about": bringing his/her resources to bear so as to realize the American dream.
- Would you pay money to merely know someone?
- Is the nature of your relationship formation and develop conducted as are gambling activities in that you "do right" by individual, thus wagering they'll, in turn, leave you something in their will? (Perhaps you do, in which case you deserve to pay an inheritance tax.)
- Do you think your child should pay money for the privilege of being born to you?
- Say you have four kids. Do you think your kids should pay a tax on whatever you spent in tuition, room, board, transportation and entertainment you for some 20 odd years (give or take) while you were alive? If not, effectively giving them more of the same in death should be no differently non-taxable.
Five -- I think the bullet remark above adequately expressed the nature of my objection on the life insurance basis.
