Should There Even Be A Death Tax?
Is it fair for your government to tax a father or mother's assets a second time when they die by making their inheritors — usually their children — pay a tax on their inheritance?
I am talking about the "inheritance tax" — or what many call the "death tax."
If a person works hard their entire life and has money, real estate or investments remaining when they die, and then gives those assets to their sons and daughters, should it be taxed again?
A large part of President Obama’s budget to transfer wealth from people who earn it to people who did not is his increase on the death tax.
Currently your government taxes your death up to 40 percent, the President want to increase that to up to 60 percent.
Here is how he plans to do that: Obama wants to impose a new capital gains tax based on the value the asset increase at the time of your death.
For example, if you purchased land for, let’s say $5 million and at the time of your death it is worth $20 million, the President wants to tack on an additional capital gains tax of 28 percent or $4.2 million dollars even if you do not sell the land. This new capital gains tax is on top of the current inheritance tax.
One of the biggest problems with the death tax is quite often families must sell their family businesses including family farms just to pay the inheritance tax because they do not have the cash on hand to pay that tax.
The death tax when combined with the state’s death tax differs from state to state, including exemptions.
My question, though, goes deeper: Should there be an inheritance tax at all if the assets are passed along to a child?
Also, why make the children pay a capital gains tax before they even sell the asset?
Let’s us discuss this today on my show the Live with Renk show, which airs Monday through Friday 9 a.m. to noon, to let me know your thoughts at (269) 441-9595.
Or please feel free to start a discussion and write your thoughts in the comment section.