Why Death Taxes Should Be Abolished
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As part of the Financial Freedom Act of 1999, Congress has approved phasing out the death tax by 2010. However, President Clinton has vowed to veto the bill, which would leave the current death tax provisions in effect. If the president carries through on his threat, this will leave the United States with the second highest tax rate on estates of any nation.
"There is no good reason to retain the death tax."
But more significant than the tax rate is the effect of the tax itself. It has almost no virtues. It raises little if any net revenue for the government, it has little effect on the estates of the very rich and its burden falls most heavily on family farms and businesses. To pay the estate tax, heirs often sell for development land that might have otherwise remained farmland or forest.
There is no good reason to retain the death tax, and many reasons it should be eliminated now. One unfortunate feature of the bill passed by Congress is that the tax will not be eliminated completely until 2010.
NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.