I hate to keep beating the same drum, but...I'm going to beat the same drum. The NY Times published an article this morning about the proposed repeal of the estate tax.
Now, I've already stated that I am against a repeal of the estate tax. As I've said before, and as the Times noted this morning, it is misleading for opponents of the estate tax to claim that it is a double tax on earnings that have already been taxed once. In many cases, that's not true. "A lot of assets that passed through very large estates have never been taxed and never will be," said Mr. Graetz of Yale. "It's a very big issue."
However, the newest plan being floated, while not repealing the estate tax, actually would be better for millionaires than an outright repeal would be. In sum, the new plan would not only exempt large estates from the estate tax, it would also exempt the heirs from paying capital gains tax on property/investments the heirs sell. Say you buy stock worth $1 million. (Who hasn't?) It appreciates to $10 million. You die and your son gets the stock. Under the new plan, not only does he not have to pay estate tax on the $10 million, when he sells the stock, he doesn't have to pay capital gains on the $9 million appreciation of the stock. What a bonanza!
How is that fair, considering that, if I sell a stock for a $100 gain, I have to pay taxes?
Taxes need to be fair, and I think the estate tax is fair. It taxes wealth that often goes untaxed during the owner's lifetime. And, the way it stands now, it will rarely if ever affect a working family; it will simply affect families who pass great deals of wealth from generation to generation, wealth that should be taxed, just like everybody else's.