“The only difference between death and taxes is that death doesn’t get worse every time Congress meets,” Will Rogers once wrote. Given Washington’s track record, it’s hard to blame Rogers for being cynical.
If President Trump gets his way, however, taxes could actually improve. One part of them, anyway: the estate, or “death” tax.
The death tax — the penalty families have to pay when a loved one dies and leaves them significant assets — has been hotly contested for years. The president vowed on the campaign trail to see it repealed, and sure enough, his economic plan would, ahem, kill it.
It shouldn’t be hard. Congress, after all, has taken steps before to do away with the death tax. A House bill that attracted not only Republican support but also that of 42 Democrats passed in 2015. It fell three votes short in the Senate, however.
Now lawmakers have another chance to do the right thing.
Wait, some may say, doesn’t the death tax just affect the super-rich? Hardly. The tax has destroyed countless family-owned businesses over the years.
Even worse, the death tax often taxes money that’s already been taxed at some earlier time. For example, the children of a family-owned farm can be asked to pay taxes again on inherited equipment, land and other assets. If they can’t pay the tax, owners of family businesses could have to liquidate their parents’ life-long achievement to pay the IRS. The death tax is simply not right.
Congress has been all over the map on this issue during the last decade or so. In 2001, lawmakers passed a law that gradually phased out the levy, which then stood at 55 percent (for those in the top tax bracket). It actually disappeared altogether in 2010 — a good year to die if you wanted to leave your business to your family and not your greedy Uncle Sam.
But like a killer in a cheap horror film, the death tax came back.