History of the Estate Tax
It seems a recurring discussion in Washington as to what to do about the Estate tax.
Depending on who is talking about it, you will hear it described as the death tax, the estate tax, the attempt to steal American's hard earned money, or even the double tax.
However, despite all the names this tax is given, little discussion comes up about what the tax actually does or why it exists.
The estate tax goes back to the early 1900s and had its foundation in the basic promise of America.
Introduced by Theodore Roosevelt, the estate tax was part of his effort to break the wealthy elite in America.
Wealth had become concentrated in the hands of the few, and the money would be passed on from generation to generation, allowing these families to develop a greater and greater wealth and hold a significant strength in American politics.
By introducing the estate tax, the very wealthy would have some of their money taken upon their death, preventing it from being concentrated in the hands of these few.
Under the estate tax, people with wealth accumulated over a certain amount will be taxed upon their death.
In addition, the money below that level will be immune, even for those people who have amounts over it.
So if the limit is set to five million dollars and a 40% tax, people will be allowed to pass on up to five million dollars of their wealth tax free, and the remainder would be taxed at the 40% level.
In this manner, the wealthy would be able to ensure a secure lifestyle for their children, at the expense of some of the money being shaved off the top.
Of course, like every tax, this one is not taken lightly by many, and has come under attack in the last twenty years.
Described as the death tax by opponents, it is criticized for robbing Americans of their hard earned money.
However, it begs the question of whether it really does this, when the money is taken after death and thus, from a person who didn't earn it but simply inherited it.
Ultimately, the estate tax seems to be here to stay.
Instead, debate will continue going forward as to what the appropriate level is for the tax, and at what base level the wealth should be set at.
Depending on who is talking about it, you will hear it described as the death tax, the estate tax, the attempt to steal American's hard earned money, or even the double tax.
However, despite all the names this tax is given, little discussion comes up about what the tax actually does or why it exists.
The estate tax goes back to the early 1900s and had its foundation in the basic promise of America.
Introduced by Theodore Roosevelt, the estate tax was part of his effort to break the wealthy elite in America.
Wealth had become concentrated in the hands of the few, and the money would be passed on from generation to generation, allowing these families to develop a greater and greater wealth and hold a significant strength in American politics.
By introducing the estate tax, the very wealthy would have some of their money taken upon their death, preventing it from being concentrated in the hands of these few.
Under the estate tax, people with wealth accumulated over a certain amount will be taxed upon their death.
In addition, the money below that level will be immune, even for those people who have amounts over it.
So if the limit is set to five million dollars and a 40% tax, people will be allowed to pass on up to five million dollars of their wealth tax free, and the remainder would be taxed at the 40% level.
In this manner, the wealthy would be able to ensure a secure lifestyle for their children, at the expense of some of the money being shaved off the top.
Of course, like every tax, this one is not taken lightly by many, and has come under attack in the last twenty years.
Described as the death tax by opponents, it is criticized for robbing Americans of their hard earned money.
However, it begs the question of whether it really does this, when the money is taken after death and thus, from a person who didn't earn it but simply inherited it.
Ultimately, the estate tax seems to be here to stay.
Instead, debate will continue going forward as to what the appropriate level is for the tax, and at what base level the wealth should be set at.
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