There are few taxes liberals love more than the death tax. They figure that once you’re dead, your heirs have no legitimate claim to your money because they did nothing to earn it. And who does have a legitimate claim to it? The government, of course! Why? Because all wealth inherently belongs to the government and anything you are allowed to use throughout the course of your life is strictly the result of their kind beneficence.
Once you’re gone . . . hand it over!
So it should come as no surprise that Democrats want to make the existing death tax even more onerous than it already is. Now you might not think it’s that onerous, since there’s an exemption of $5.4 million for single people and $10.9 million for married couples. You only pay the tax, which is currently 40 percent, on what you inherit beyond those amounts.
But that’s misleading. Most people figure, hey, I don’t have that kind of money, but if you own a small business or midsize business, you very well might. The death tax applies to all your assets, not just your cash on hand. If you own a building (or several) as well as fixtures and other equipment, then yes, those things plus your business’s cash on hand plus your personal business may very well put the total value of your assets above the threshold for the death tax to kick in.
Oh, and by the way, the IRS doesn’t accept buildings, equipment and fixtures as payment for the death tax. They will accept cash, thank you very much. So if you inherit assets like these, you will need to sell them to raise the cash to pay the tax.
Democrats think reducing this tax would be a “giveaway to the rich.” How can you give someone something that is theirs and not yours in the first place? Only a politician could think like that. Democrats, who want to lower the exemptions and raise the rate, claim that much of the wealth at issue has never been taxed.
That is not true. Let me show you four ways that most of this income absolutely has been taxed:
If you buy stock, you’re buying it with after-tax dollars. If you realize a capital gain from that stock purchase, you pay tax on the capital gain.
If you put money in a savings account, you’ve already paid taxes on the earning. If you earn interest, you have to claim the interest.
If you buy a CD, you buy it with after-tax dollars, and you pay taxes on the interest.
If a farmer goes out and buys seed, he’s buying it with after-tax earnings, and he also pays taxes on the revenues from any crops he sells.
The idea that anyone is not paying enough taxes on the money they have is about as idiotic as a thing can be. What should be done with the death tax is complete repeal. That would save many small businesses from having to sell all their assets to pay the tax, and it would keep a lot more capital in the productive sector of the economy, which is the private one.
Democrats don’t like that idea because they think all capital is inherently theirs. That’s why anyone who has capital and is interested in making more would be wise not voting for Democrats. Likewise, anyone who doesn’t have much capital but would be interested in earning more would be wise not to vote for Democrats, because once you finally earn it, they’re just going to find a way to take it from you! Even if they have to wait until you die. In fact, especially then.
