SEPTEMBER 8, 2016 we will celebrate the 100th anniversary of the Federal Estate Tax. It is indeed a date to celebrate as the Federal Estate Tax represents the best in progressive tax and socio economic policy. The tax as presently constituted affects less than 1% of the wealthiest American families. However, over the years, a sizeable lobby has developed demanding the elimination of the tax. Those lobbies use inaccurate characterizations and incomplete evidence to argue their claims that the estate tax is a burden upon the average American rather than an effective way to fight income and wealth disparity. Few Americans other than the most wealthy are actually affected by the tax.
I am re-publishing an article I received from the Social Sciences Research Network which is a law review article published in the Akron Law Review, Volume 49, Page 328. The article was written by Professor Richard Gershon of the University of Mississippi Law School. The article is the result of Professor Gershon’s moderating role in a tax policy seminar held at the law school.
I am posting this for all to read lawyers and nonlawyers alike. It is written is direct plain language with a minimum of legalese and should be easily read by anyone. I welcome any questions or comments.
THE SOCIO-ECONOMICS OF THE FEDERAL ESTATE TAX: WHY DO SO MANY PEOPLE HATE (OR LOVE) THIS CENTENARIAN?
(Table of Contents Omitted)
The federal estate tax will reach its 100th birthday on September 8, 2016.1 Most centenarians are celebrated for making it 100 years. They are congratulated on morning news shows, and people send them nice cards. Sadly, the estate tax’s birthday will likely go largely unnoticed. During most of its 100 years, the tax has had detractors calling for its immediate demise, even though the tax has historically affected only the estates of the wealthiest 1-8% of American families.2 Today, fewer than 1% of families incur the tax.3 This Essay explores the reasons why taxpayers despise the estate tax when it is very unlikely that those taxpayers, or their families, will ever have to pay it. Furthermore, this Essay supports the retention of the estate tax. The remainder of this Essay discusses the socio-economic value of keeping the estate tax, enacted “to raise revenue during a time of war, enhance the progressivity of the tax system, and curb concentrations of wealth,” all of which are just as important today as they were 100 years ago.4
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