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Financial Planning > Tax Planning > Tax Reform

Time To Unmask The 'Death Tax' Scam

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Time To Unmask The Death Tax Scam

I hope Tom Daschle is right in his prognosis that time is on the side of reform of the estate tax, not permanent repeal.

The Senate Minority Leader gave some hope to the advocates of reform when he spoke at the recent annual meeting of the Association for Advanced Life Underwriting. The costs of the war in Iraq and the mounting budget deficits apparently are starting to cause some doubt as to whether complete repeal of this tax is justified.

As far as I am concerned the whole issue of the estate tax is nothing more than a brilliant marketing scam enabled by the tax ignorance of the American public. The truth is that this tax puts a crimp in the fortunes of only the most infinitesimal sliver of American families. Yet, billed as the “death tax,” it has become a rallying cry for the anti-tax faction of the GOP, who have obviously studied their Henry Mencken.

I have never understood the reflexive anti-tax attitude that predominates among the more conservative wing of the Republican party. Since these representatives and senators are no slouches at elbowing their way into breakfast, lunch and dinner at the “pork barrel”all of which is subsidized by tax revenuesI have to wonder what taxes they are really against.

Are they against taxes that pay for construction of new highways in their districts or states? Not likely. What about taxes that would raise the roof on a new Hooters restaurant in Mississippi? Well, no, you see, that needs to be tax-subsidized because that particular section of the Magnolia State is really Hooters-deprived.

You get the picture.

I think its clear that the “Im against all taxes” stance fails the test of experience. What these folks are really against, I believe, is “redistribution of income.” But its redistribution with a twistthey obviously dont mind when income is redistributed in their direction, but have a firm “get your hands off my money” attitude when its redistributed to someone else.

Particular targets are programs that seem to give a something to “undeserving,” i.e., needy, segments of the population. A few examples? Social Security, Medicare, Medicaid, extended unemployment benefits.

These programs make a huge difference in millions of lives but are just so much red meat to those who would transport us back to a world of unbridled Darwinism.

I cant help but think that that world might just prove a lot rougher than the anti-tax proponents could handle. But never let it be said that common sense got in the way of brandishing a slogan.

I have to wonder why even a compromise that would cover more than 99% of all estates is not enough for the estate tax repeal fanatics. Imagine how angry most people would be if the truth was clearly spelled out for themnamely, that they would likely never be subject to the estate tax, but that a few millionaires will make out like bandits.

Industry organizations have been pretty steadfast in their opposition to permanent repeal of the tax. But if they are really serious, they need to join with others of similar belief to start engaging in a fierce campaign that labels this “death tax” canard for what it really is.

Daschle suggests counteracting “death tax” sloganeering with talk of a “birth tax,” or the share of the national debt that every child born is saddled with. As a rallying cry, birth tax may not be the ultimate grabber, but given the facts, dont you think most people would be more outraged by the idea of everyone paying to come into the world than a very few paying to leave it?

Steve Piontek


Reproduced from National Underwriter Edition, May 7, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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