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  • House Votes to Raise Death Tax

    The U.S. House of Representatives voted to permanently extend the death tax at its current 45 percent rate and $3.5 million exemption. This is a significant tax hike since the death tax was supposed to expire on January 1, 2010.

    The increase of the death tax is a major blow to the badly weakened economy since the tax is a huge drag on economic activity. It is also a major disappointment for countless family-owned businesses slammed hard by this unfair tax.

    Despite passage in the House, the death tax increase is not yet law since the Senate has not acted. Earlier this year it passed a resolution to extend the death tax permanently as well, but at a lower rate and higher exemption level (35 percent and $5 million).

    The Senate version would be better for the economy and family-owned businesses, but full repeal would be best. It would put 1.5 million unemployed Americans back to work and lift a heavy burden from families all across the country.

    As the debate moves to the Senate, you can continue to find all of the Heritage Foundation’s work on the death tax – including new videos detailing the struggles the death tax imposes on family-owned businesses – at www.heritage.org/deathtax.

    Posted in Economics [slideshow_deploy]

    10 Responses to House Votes to Raise Death Tax

    1. Freedom of Speech, T says:

      Another blow to entrepeneurs who have worked their entire lives, at great financial and economic risk, to attain the American Dream.

      You work to be successful. You provide employment and thus support other families who may not otherwise have a job. You die and Uncle Joe comes along in the form of a bunch of greedy heartless bureacrats and picks over your self-made fortune because YOU WERE TOO SUCCESSFUL?

    2. Cornu Ammonis, US says:

      So, you're lobbying to stop a bill that will actually improve the current estate tax (raising the exemption from $1 million to $3.5 million), and will affect 0.25% of all estates? Get real. Most "family-owned" or "minority-owned" businesses do not have $3.5 million in assets after liabilities are deducted. Almost none of the Americans who Congress represents can leave $3.5 million in their estate – that's why only 0.25% of all deceased would end up paying.

      Further, the effective income tax rate for the richest 0.25% is actually LOWER than many people in the upper middle class, due to the fact that the very rich make most of their income from capital gains taxed at 15%. So a higher estate tax (which you smartly dub a "death tax") is only fair given their wealth and the nature of a progressive tax system. The trite statement that "this tax cut will create X million jobs" is just as unreal as each time Bush said it before making tax cuts for the richest 1% that were even bigger than getting rid of the estate tax. We didn't see job growth under Bush, but rather a massive financial disaster and a balanced budget going to the biggest deficit in history.

      But you conservatives do a good job at getting about half the population to support something that benefits less than 1%, so I expect you'll be able to mobilize your masses behind this plutocratic proposal also.

      -Cornu Ammonis

    3. Katie US says:

      What we want is the promised "No tax"! That is way better than any "death tax". TAXES were already PAID on this $. If the Gov. managed itself better it would not need to rape its people of their freedoms and $. OPEN your eyes people. We are becoming the socialist state that was once know as America.

    4. Cornu Ammonis, US says:

      Katie, are you worth $3.5m? If you're married, the exemption level is $7m total, by the way. If you don't you don't think your descendants will receive $3.5m from you, or $7m from you and your husband, then you won't be taxed at all. So why support cutting taxes that will only hit the richest 0.25%?

    5. once upon a time dem says:

      Bad policies, terrible bills that is what this administration is doing and thus it has crippled our economy and left a terrible debit to our children and grandchildren – I will never support the Democratic party again – They are so far left and are not for the American people. Their only answer is to tax us to death and in death. Own a small business and this administration is now making the small business owner the current "boogie Man". The Democrates love to blame everyone else but their own policies ( I see the bloggers still love to blame Bush).

    6. Freedom of Speech, T says:

      Dear Cornu,

      You are missing the point. You are espousing class warfare.

      I can't believe you are defending the government taking money from anyone that has earned it – no matter how rich they are.

      What was the original tax rate once the 16th Amendment was ratified? Do you honestly believe the founders would approve of the present tax code?

      The problem is we have infected our society with this living, breathing, constitution mentality. You seem intelligent enough but the fact you see nothing wrong with the oppressive tax system is troubling. Every tax should be challenged. Why? It's because far too many politicians have proven themselves incompetent, abusive, misleading, and shady, when handling taxpayer revenue.

    7. Smaller Government, says:

      I'm sad to say this year we recently lost a sibling. We thought the 30% tax on an amount under $10,000 was extreme considering the Federal and State taxes were already paid before we inherited it. The leadership of this country should concentrate on shrinking the size of government, maintain the military and infrastructure (roads/bridges). Please stay out of the pockets of the poor and middle class.

    8. Pingback: Want a clear test of what separates the Left and Right? [Darleen Click]

    9. Cornu Ammonis, US says:

      Smaller Government – are you sure that wasn't a state estate tax? From what I've read the current exemption level is $1 million, so it probably wasn't federal.

      Freedom of Speech – thanks for making a well-put argument from the originalist perspective: "The problem is we have infected our society with this living, breathing, constitution mentality."

      But, I don't agree with that view of government's limitations (I read the Heritage Foundation mainly to see how those with opposing views from mine see politics).

      To paraphrase the great Justice Jackson, "the Constitution is not a suicide pact." The Founding Fathers could no more predict that their small, weak nation of 5 million farmers and merchants would become a colossus and the most important state in the world, than we can predict what they would say if they governing us today. But men like Madison and Franklin were ingenious in keeping the terms of the Constitution vague, so that future generations could decide how to apply its principles to best serve their needs. That's why they wrote in such differently interpreted powers for Congress, such as to "regulate commerce … among the several states" and to collect taxes "to promote the General welfare". They also end with the power to "make all laws which shall be necessary and proper for carrying into execution the foregoing powers". Sure, they did not write in "fund a space program" or "provide health care" in Article I-8, but they did not need to.

      They assumed that their republic would elect leaders who would understand the basic principles upon which the Constitution stood for, and then apply them as they saw fit to best serve their nation in their time. Now, we can disagree on who the best leaders are, but to tie their hands behind their backs by saying that the signers of the Constitution would not comprehend or support their policies is absurd – and almost certainly, not the intention of the Founders.

      As for the 16th Amendment, like all amendments, it was only passed with much difficulty and a great majority of Americans supporting it – 2/3 of Congress, 3/4 of states. There were certainly those back then and those today who did not believe an income tax was right, but I think history has proven them wrong. There is no way that the US would have become the greatest power on earth, and stayed that way for more than 60 years, if their national government was funded just by tariffs and stamp taxes like they were in the 1790's (and in fact, tariffs basically don't exist today). There is a time for smaller government, but it is only relative to the contemporary and within the bounds of reality.

      Finally, if I'm supporting "class warfare" by saying that the rich should have to pay an additional tax when they inherit a few million dollars, then I have to say, the rich are doing pretty damn well in the class war! After all, progressive taxes like this have been around for about a hundred years, and the rich seem to be winning quite effortless. I haven't seen many Upper West Side apartments or 50 foot yachts being "conquered" by uninsured women or unemployed veterans recently…

    10. Pingback: Death Tax Dies Tonight | The Foundry: Conservative Policy News.

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