I provided the opposing view to USA Today’s pro-death tax editorial today. In my column, I pointed out that the tax was inherently unfair, and also noted that it is a perverse from of double taxation:
If there were a prize for the most destructive tax, the death tax surely would be a prohibitive favorite. Known to policy wonks as the estate tax, this levy is a punitive form of double taxation that penalizes people for trying to create a nest egg for their children. …This matters because every economic theory — even Marxism — agrees that capital formation is the key to growth. Higher living standards are possible only if people invest by setting aside some of today’s income. But a punitive death tax, especially when combined with other forms of double taxation on capital gains and dividends, reduces the incentive to save and invest. Scholars who have examined this issue estimate that the death tax has reduced America’s stock of saving and investment by nearly $850 billion. Moreover, the death tax is a job killer, reducing employment by 1.5 million. Ideally, the death tax should be abolished. Nations as diverse as Russia, Australia and Sweden have killed this unfair levy.
In their pro-death tax editorial, the folks at USA Today offered a rather absurd argument about double taxation, claiming that the dead person is not taxed twice because he or she is dead when the death tax is paid:
Another canard is the double taxation argument, which goes like this: Someone becomes wealthy through hard work and enterprise, all along paying hefty taxes, and then is walloped again at death. This argument has one slight problem: Dead people don’t really pay taxes. Estate taxes are effectively paid by the people who are alive to feel the effect of the tax: the heirs.
Not only is this argument morally dubious, it is economically nonsensical. The death tax is bad for growth because it encourages wealthy people (who are still alive) to be less productive because they want to minimize a future tax. That is the reason America has a huge “estate planning” industry. This industry exists to advise people how to use their money less productively, which is why academics have found the big negative effects I cite in my column.
[…] the right way to deal with that inequity is for the U.K. to eliminate its death tax, not to extend it to Kings, Queens, and […]
[…] the right way to deal with that inequity is for the U.K. to eliminate its death tax, not to extend it to Kings, Queens, and […]
[…] Jackson paid tax when he first earned his money. Those earnings shouldn’t be taxed again simply because he […]
[…] Jackson paid tax when he first earned his money. Those earnings shouldn’t be taxed again simply because he […]
[…] I’m also an economist, so I don’t like the tax because it is the most pernicious form of double taxation. The levy not only drains capital from […]
[…] correct rate for the death tax is zero, so I’m glad the Trump family did everything possible to minimize […]
[…] I’m even wondering whether I should allow myself to hope that the death tax can be repealed. The final outcome will depend on negotiations on Capitol Hill. The House bill gets rid of the tax […]
[…] So what would happen if lawmakers instead did the right thing and abolished this wretched example of double taxation? […]
[…] earn on your bank balances and other financial accounts. There’s no capital gains tax. There’s no death tax. And there’s no double taxation of […]
[…] your bank balances and other financial accounts. There’s no capital gains tax. There’s no death tax. And there’s no double taxation of […]
[…] other positive features mentioned in the column that are worth celebrating. Governor Bush’s plan eliminates the death tax, which is an especially punitive form of double taxation. His proposal also gets rid of the […]
[…] other positive features mentioned in the column that are worth celebrating. Governor Bush’s plan eliminates the death tax, which is an especially punitive form of double […]
[…] positive features mentioned in the column that are worth celebrating. Governor Bush’s plan eliminates the death tax, which is an especially punitive form of double […]
[…] of those answers are correct, but they don’t fully explain why this pernicious levy still […]
[…] death tax is triple taxation, so it also should be abolished. Regardless, letting a family hold onto its own money is not the same as taking from Person A to […]
[…] death tax is triple taxation, so it also should be abolished. Regardless, letting a family hold onto its own money is not the same as taking from Person A to […]
[…] No death tax – Income should not be subject to yet another layer of tax simply because someone dies. The Rubio-Lee plan eliminates this morally offensive form of double taxation. […]
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[…] No death tax – Income should not be subject to yet another layer of tax simply because someone dies. The Rubio-Lee plan eliminates this morally offensive form of double taxation. […]
[…] there shouldn’t be any double taxation of income that is saved and invested, both the death tax and capital gains tax should be abolished. Needless to say, increasing either tax would have a […]
[…] there shouldn’t be any double taxation of income that is saved and invested, both the death tax and capital gains tax should be abolished. Needless to say, increasing either tax would have a […]
[…] means no death tax, no capital gains tax, no double taxation of interest or dividends. And businesses get a […]
[…] The death tax rate will be boosted from 35 percent to 40 percent (which doesn’t sound like a big step in the wrong direction until you remember it was 0 percent in 2010). […]
[…] The death tax rate is boosted from 35 percent to 40 percent (which doesn’t sound like a big step in the wrong direction until you remember it was 0 percent in 2010). […]
[…] the necessary support from the Tories, but it’s remarkable that it has been proposed. Like the death tax, the wealth tax is a turbo-charged form of double […]
[…] tax, but top tax rates would be reduced to 25 percent and many forms of double taxation, like the death tax and capital gains tax, presumably would be reduced or […]
[…] tax, but top tax rates would be reduced to 25 percent and many forms of double taxation like the death tax and capital gains tax presumably would be reduced or […]
[…] the necessary support from the Tories, but it’s remarkable that it has been proposed. Like the death tax, the wealth tax is a turbo-charged form of double […]
[…] would have ever thought that Russia would have the correct death tax rate, while the United States would have one of the world’s worst […]
[…] The death tax rate will be boosted from 35 percent to 40 percent (which doesn’t sound like a big step in the wrong direction until you remember it was 0 percent in 2010). […]
[…] The death tax rate will be boosted from 35 percent to 40 percent (which doesn’t sound like a big step in the wrong direction until you remember it was 0 percent in 2010). […]
[…] these premature deaths will only occur because the President is greedy for more revenue from a tax that shouldn’t even exist. Indeed, it’s worth noting that every pro-growth tax reform plan – such as the flat tax or […]
[…] these premature deaths will only occur because the President is greedy for more revenue from a tax that shouldn’t even exist. Indeed, it’s worth noting that every pro-growth tax reform plan – such as the flat tax […]
[…] would have ever thought that Russia would have the correct death tax rate, while the United States would have one of the world’s worst […]
[…] necessary support from the Tories, but it’s remarkable that it has been proposed. Like the death tax, the wealth tax is a turbo-charged form of double […]
[…] would have ever thought that Russia would have the correct death tax rate, while the United States would have one of the world’s worst […]
[…] would have ever thought that Russia would have the correct death tax rate, while the United States would have one of the world’s worst […]
[…] would have ever thought that Russia would have the correct death tax rate, while the United States would have one of the world’s worst […]
[…] would have ever thought that Russia would have the correct death tax rate, while the United States would have one of the world’s worst systems? Article source: […]
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[…] Perry prosaic taxation gets absolved of a death tax, a capital gains tax, and a double taxation on dividends. This would significantly revoke a […]
[…] Perry prosaic taxation gets absolved of a death tax, a capital gains tax, and a double taxation on dividends. This would significantly revoke a […]
[…] Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the […]
[…] Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the […]
[…] Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the […]
[…] Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the […]
[…] Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the […]
[…] Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the […]
[…] Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the […]
[…] about higher income tax rates, higher payroll tax rates, an expanded alternative minimum tax, a renewed death tax, a higher capital gains tax, more double taxation of dividends, or some other way of extracting […]
[…] about higher income tax rates, higher payroll tax rates, an expanded alternative minimum tax, a renewed death tax, a higher capital gains tax, more double taxation of dividends, or some other way of extracting […]
[…] about higher income tax rates, higher payroll tax rates, an expanded alternative minimum tax, a renewed death tax, a higher capital gains tax, more double taxation of dividends, or some other way of extracting […]
[…] several layers of tax – capital gains tax, corporate income tax, double tax on dividends, and death tax, this is not a trivial […]
[…] the risk of stating the obvious, the correct death tax rate is zero, as I’ve explained for USA Today. Indeed, I also cited evidence from Australia and the United States about how people […]
[…] the risk of stating the obvious, the correct death tax rate is zero, as I’ve explained for USA Today. Indeed, I also cited evidence from Australia and the United States about how people […]
[…] the risk of stating the obvious, the correct death tax rate is zero, as I’ve explained for USA Today. Indeed, I also cited evidence from Australia and the United States about how people […]
[…] Then there are provisions such as the 35 percent death tax. Is this bad news, because it is an increase from zero percent this year? Or is it good news because it is much lower than the 55 percent rate that was scheduled to take effect beginning next year? That’s hard to answer, though I know the right rate is zero. […]
[…] Then there are provisions such as the 35 percent death tax. Is this bad news, because it is an increase from zero percent this year? Or is it good news because it is much lower than the 55 percent rate that was scheduled to take effect beginning next year? That’s hard to answer, though I know the right rate is zero. […]
[…] And for the not-so-obvious reason: Then there are provisions such as the 35 percent death tax. Is this bad news, because it is an increase from zero percent this year? Or is it good news because it is much lower than the 55 percent rate that was scheduled to take effect beginning next year? That’s hard to answer, though I know the right rate is zero. […]
[…] Then there are provisions such as the 35 percent death tax. Is this bad news, because it is an increase from zero percent this year? Or is it good news because it is much lower than the 55 percent rate that was scheduled to take effect beginning next year? That’s hard to answer, though I know the right rate is zero. […]
[…] Then there are provisions such as the 35 percent death tax. Is this bad news, because it is an increase from zero percent this year? Or is it good news because it is much lower than the 55 percent rate that was scheduled to take effect beginning next year? That’s hard to answer, though I know the right rate is zero. […]
[…] criticized the death tax on many occasions, including one column in USA Today explaining the economic damage caused by this perverse form of double taxation, and I highlighted a few of the nations around the world that have eliminated this odious tax in […]
[…] criticized the death tax on many occasions, including one column in USA Today explaining the economic damage caused by this perverse form of double taxation, and I highlighted a few of the nations around the world that have eliminated this odious tax in […]
[…] criticized the death tax on many occasions, including one column in USA Today explaining the economic damage caused by this perverse form of double taxation, and I highlighted a few of the nations around the world that have eliminated this odious tax in […]
[…] criticized the death tax on many occasions, including one column in USA Today explaining the economic damage caused by this perverse form of double taxation, and I highlighted a few of the nations around the world that have eliminated this odious tax in […]
[…] criticized the death tax on many occasions, including one column in USA Today explaining the economic damage caused by this perverse form of double taxation, and I highlighted a few of the nations around the world that have eliminated this odious tax in […]
[…] criticized the death tax on many occasions, including one column in USA Today explaining the economic damage caused by this perverse form of double taxation, and I highlighted a few of the nations around the world that have eliminated this odious tax in […]
[…] should go without saying, by the way, that the correct rate for the death tax is zero. It’s also worth noting that this is an issue that shows that incentives do […]
[…] should go without saying, by the way, that the correct rate for the death tax is zero. It’s also worth noting that this is an issue that shows that incentives do […]
[…] professor Michael Graetz of Columbia University. It should go without saying, by the way, that the correct rate for the death tax is zero. It’s also worth noting that this is an issue that shows that incentives do […]