Taxed To Death

Taxed To Death

As a part of its usual modus operandi, the Administration is looking in all the same places to generate revenue in support of its massive spending programs. Unfortunately, skillful, deliberate reduction of spending is not one of the places the President will go to create a defensible, viable budget. Rather, building a revenue chest on the backs of hardworking, taxpaying citizens remains central to the President’s plan for managing the nation’s finances.

Particularly annoying for a vast number of Americans is the obsession the White House seems to have with tapping into the savings of the deceased. Recently, Americans for Tax Reform reported on the Administration’s rather veiled efforts to claim a larger share of estate revenue – “The Obama budget calls for a stealth increase in the death tax rate from 40% to nearly 60%. Here’s how it works: Under current law, when you inherit an asset your basis in the asset is the higher of the fair market value at the time of death or the decedent’s original basis. Almost always, the fair market value is higher. Under the Obama proposal, when you inherit an asset your basis will simply be the decedent’s original basis.” The math speaks for itself – in almost every case, the inheritor will have to pay taxes on a much larger gain.

It has long been an American tradition that parents work hard to ensure that they and their offspring benefit from the fruits of their labor. Never has the equation presumed that the government should become such a primary beneficiary of these fruits. Let’s hope the Administration doesn’t irretrievably alter this equation on its behalf.

 

Click here to read the full ATR article.

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