NO TAXATION WITHOUT RESPIRATION
July 5, 2006
Warren Buffett's charitable gift to the Bill & Melinda Gates Foundation is admirable. Not so admirable is his avoidance of a big chunk of estate taxes he supports for everybody else, says Investor's Business Daily.
Despite being called equitable by Buffet, the estate tax is far from it, says IBD. The costs associated far outweigh the intended benefits, given that:
- It accounts for only a small portion of government revenues -- an expected $28 billion, or 1.2 percent, of federal receipts in 2006.
- Money and time are spent on estate planning and tax avoidance, not on creating jobs and growing the economy.
- Congress' Joint Economic Committee estimates that it drains about $60 billion from the economy each year.
- It is a double tax on families and small-business owners who have already paid taxes in many forms as they accumulated their wealth.
As even Buffett suggests, the death tax is more about social engineering and income redistribution than about fairness and raising revenues. But perhaps a better way is permanent repeal. A study by the American Family Business Institute shows that it could create up to 200,000 jobs by boosting economic activity.
Source: Editorial, "No Taxation Without Respiration," Investor's Business Daily, July 3, 2006
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