Snow Expresses Opposition To Death Tax

by Mike Godfrey, Tax-News.com, Washington

10 November 2003

United States Treasury Secretary John Snow last week told a Treasury Round Table that the Bush administration remains opposed to the ‘death tax’ which he labelled “simply unfair and wrong.”

“I think the facts are pretty clear. The death tax falls on income that has already been taxed, sometimes twice before. It forces the destruction of thousands of small family businesses, and it discourages work, savings and asset-accumulation. It diverts resources into tax avoidance and enforcement that could be spent in economically productive activities. And in the end, some studies suggest it may cost the government as much as it collects,” explained Mr Snow, adding: “It’s anti-savings, anti-family, and anti-small business. It needs to end.”

The repeal of the estate tax is part of President Bush’s six-point plan aimed at reviving the US economy.

Presently, estates worth up to $1 million are exempt from the death tax ($2 million for couples) which excludes all but 2% of estates in the United States. Above this level, the tax kicks in at a rate of 49%, which is to be eased to 48% next year when the exemption threshold is raised to $1.5 million.

Under a law enacted in 2001, the tax rate is set to fall to 45% in 2009, and the exemption level will be raised to $3.5 million, before the tax disappears altogether in 2010. However, it is set to be resurrected in 2011 at a rate of 55%.

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