This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
  • Delicious




Support Grows For Estate Tax Repeal

Mike Godfrey, Tax-news.com, Washington

22 May 2000

The debate over one of the oldest and most common forms of taxation - inheritance or estate taxes - rages on in the US, and this week the House Ways and Means Committe will consider a bill to repeal existing inheritance taxes.

The Republicans have been ever-persistent in their efforts to repeal such taxes, and with the current system widely considered to be outdated and unjust it appears that the Democrats may be prepared to help.

Some Democrats have already given public support to the bill. But the issue of estate taxation is a very emotive one in the US. Democrat Eva Clayton says 'the very rich are not paying it because they know how to get around it. This tax disproportionately falls on the people who can't adjust their accounts ahead of time'. Fellow Democrat Jennifer Dunn more bluntly states that 'the death tax is unfair, unethical and unnecessary'.

Currently about 2 per cent of US citizens pay estate taxes, and under current law $675,000 in assets marks the exemption limit. That exemption is due to rise to $1 million by 2006. Nevertheless, those behind the repeal bill argue that small business-owners and farmers would still be hit quite severely whilst the more wealthy are well-versed in tax-avoidance strategies. Even Hillary Clinton, campaigning for the Senate in New York, calls for the raising of the exemption to $1.75 million for family farms and family-owned businesses.

Yet support amonst the Democrats is not universal. Some clearly believe that a straight repeal of estate taxation would mainly benefit the very rich and the country would lose an important redistributive mechanism. Repeal would cost an estimated $65 billion over the next decade.

So the issue is certainly not black and white. There are those with reasons for wanting estate tax to stay and there are others who regard the tax as wholly unjust. A vote on the current bill, which would phase out inheritance tax over ten years is set for early June.

Charles Rangel, senior Democrat on the Ways and Means Committee, summed up the likely outcome: 'We can eliminate the estate tax for the overwhelming majority of American families. However, a total repeal of the estate tax gives an enormous windfall to a tiny few of the wealthiest American families'.

.

 

 






Write a comment