The Worst Tax
Before beginning, let me reiterate that I don’t mind paying my fair share of the nation’s tax bill, though I don’t believe the need for some of those taxes is questionable and I completely detest any wasteful use of those dollars under any circumstances.
But there is one tax in particular that I think is immoral: the estate tax.
Even though this particular tax may never come into play for you or me, since there are certain exclusions that generally mean this tax only applies to larger estates, I am a person who is largely guided by what is fair and equal for all. I do not believe in treating any class of people differently than another and I don’t like situations where people are punished for “doing the right thing”. For this discussion, I don’t believe the AMOUNT of money involved should be an issue… it is the REASON for the tax that I have a problem with.
Here’s a scenario:
I work hard all my life, earn a lot of money, pay tax on those earnings, and save most of what’s left. Unless absolutely necessary, I don’t spend it… I put it into savings. As time goes by, the money I save earns some interest… and I pay taxes on the interest earnings every year but I save anything that’s left over. So, I paid taxes on my original earnings… and I paid tax on the interest my savings earned. Fair enough.
Let’s say I was disciplined and, after years of saving diligently, I now have an account of a few million dollars… say, $3 million. A lot of money, to be sure, but a million dollars isn’t as much as it used to be… in other words, it’s not a huge stretch for someone to be a multi-millionaire these days.
And then I die.
In 2008, the estate tax threshold is $2 million, so now my heirs will not get all the money I saved… a tax will be taken first. The tax could be up to 45% of the taxable amount!
Why should the government TAKE such a huge bite out of my wealth, which I worked hard for and ALREADY PAID TAX ON? What is the justification for that tax?
Let’s change the scenario:
Instead of being quite as diligent about saving… instead of deciding to leave my money to my kids… I decide to buy a big, expensive car every year or so. And I take a long, luxurious trip abroad every year. And so on. In other words, I spend my money rather frivolously over the years instead of accumulating it.
And then I die.
In this case, I spent so much that my estate doesn’t fall under the qualifications of the estate tax. My heirs receive less… and the government gets no estate tax.
If anything, this seems to me to be the exact opposite of the way it should be!
If I decide to deny myself certain pleasures and pass my money along to my children, there should not be a tax penalty. I already paid tax on the original earnings as well as the interest that money earned in my savings/investment account. So, it gets taxed again? The message here is: saving is bad… taking care of your children is bad… being selfish and self-centered is good!
And that’s why I believe this is an immoral tax.
