Today, we Americans pay taxes when we earn our paychecks, when we save, when we invest, when we buy products and services, and then, when we are foolish enough to die, the government wants half of what is left.
This means the same dollar of income is taxed three to four times BEFORE the tax collector asks many small businesses and family farms to liquidate more than half of their saved assets for estate taxes.
Grover Norquist is president of Americans for Tax Reform, a coalition of groups, individuals and businesses opposed to higher taxes.
On April 15, by an overwhelming vote of 272-162, the House of Representatives passed legislation to end this immoral tax. More than 40 Democrats joined with Republicans to make repeal the onerous death tax permanent. It's now time for the Senate to take up this measure and for Congress to end this dreaded tax once and for all.
At least 60 United States Senators have at one time or another pledged to permanently repeal the death tax. Yet, talk is swirling in Washington that a "deal" is on the table that will reduce the death tax and not repeal it.
Anything short of full repeal is completely misguided. American taxpayers understand that cutting the death tax is just tinkering on the edges. Ending it is a matter of principle.
Polls show that 70 percent of the American public believes death should not be a taxable event and that families should not be punished for saving to pass on the fruits of their hard work to their heirs. It speaks very much to the health of the nation that such a large plurality of Americans want to abolish the death tax because they see it as fundamentally unjust.
Playing to the politics of hate and class division, some will point out that a minority of Americans that pay this tax. What these critics miss is that Americans of all means believe the government should not tax the same dollar of income twice and in this case three or four times.
American taxpayers particularly do not like the idea that government is taxing the act of the death. This is a matter of principle and values and not a question of whether they are personally affected by the tax itself.
Repeated efforts to reduce the death tax have only met with temporary success. Each time, rates crept up again. Trimming the tax now will only result in raising the tax at a later date. Abolition finally ends this shell game that has played out for more than 90 years.
Legislation to abolish the death tax completely passed Congress in 1999 and in 2000, only to fall to Bill Clinton's veto each time. In 2001, however, President Bush signed legislation phasing out the tax. Under the legislation, the tax was gradually reduced in the years 2002-2009 and finally abolished in 2010. However, due to arcane budget rules, the death tax reappears in 2011 with the pre-2001 tax rates.
Legislation to extend the repeal through 2010 is expected to come to vote this summer and the liberal special interests have intensified their misinformation campaign. They argue that confiscating savings from a small business owner and redistributing that money for new government programs is a matter of tax fairness. Yet, they miss the fact that they are punishing those who save to accumulate wealth and rewarding those who choose to spend all of their money before dying.
Under the current tax regime, two identical taxpayers with the same amount of income are treated very differently. If taxpayer one chooses to spend all of her income before dying that person pays no additional federal tax. If taxpayer two, however, chooses to save her money to pass onto her children, the government will collect more than half of everything she owns. The idea that this constitutes tax fairness is just absurd.
This campaign of misinformation is being financed by wealthy individuals that will never pay the death tax. Their money has long been hidden by accountants and tucked away in trusts. Yet, the small businessmen or family farmers, who lack the resources needed to accomplish these tax code tricks, are being forced to sell assets that took an entire lifetime to build. This is a major reason why 70 percent of small businesses do not survive in the second generation.
A supermajority of Senators understands these facts. Having an up or down vote on permanent death tax repeal will finally bury this onerous and immoral tax for good.