Nov. 2017
Fix (Don't Flush) the Estate Tax
By John Fullerton
The Estate Tax, or a tax on wealth passed onto heirs, is not unique to America, but many OECD countries have no such tax.  Only Japan, South Korea, and France have statutory estate tax rates higher than the US rate of 40%, but in America, the first $11mm is exempt for couples.  By definition, only the truly wealthy pay the wealth tax, although loopholes abound. 
Enacted in 1916 in response to the excesses of the first Gilded Age and a search for revenues, the Estate tax is on the chopping block in this second Gilded Age.  Strangely, it's getting less attention than the other components of the "tax plan," apparently because it doesn't raise much money (as if $20 billion is not much money).   Defenders of the plan either (falsely) suggest it breaks up family farms and small business, or more cynically, they maintain that "anyone smart enough to amass a large fortune is smart enough to avoid paying it anyway."  That's the spirit!

Yet there is probably no aspect of the U.S. tax code more aligned with the values that the Founding Fathers risked their lives for than the law taxing inherited wealth.  After all, what the American Revolution was all about was emancipation from the corrupted power of the King and a general, well-considered aversion to Old World aristocratic rule.   

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"The external glitter of wealth conceals a corrupt political core that reflects the growing gap between the very few rich and the very many poor."
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