Reasons to Keep the Estate Tax?

Arguments are being made that we should keep the estate tax for many reasons, including:

• It only affects a few people who inherit large sums of money—and who can afford to share some of the windfall with their government.
• The wealthy have paid lower taxes during life, so it is only fair that they pay more at death. For example, Social Security taxes stop at a little over $100,000, and capital gains taxes are lower than regular income taxes.
• The government needs money now more than ever as the deficit soars.
• Although the estate tax contributes less than 1% of federal revenue, it still helps fund government projects.
• The estate tax does not stifle economic growth.
• People who inherit large amounts of money are four times more likely to quit working than those who inherit smaller amounts.
• The tax burdens those who inherit the money, not those who earned it.
• Imposing the tax does not conflict with entrepreneurship, hard work, and thrift.

See Michael J. Graetz, It’s Fair, and We Need the Revenue, W.S.J., Sept. 20, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.