From the article “The Very Bad Arguments for Killing the Estate Tax,” the estate and gift tax is one tax that is strongly opposed by the Americans compared to all other forms of taxes. The poor are known to oppose the tax more strongly than the rich. The main reason for such opposition is strong belief in unfair arguments. Many people believe that the government should not interfere with how people dispose their wealth; instead, they should be given rights to dispose them as they see fit. Second, there is a strong believe that permanent, hereditary elite will make societies unfair and unhealthy. In particular, the opponents argue that such taxes only punish success. Additionally, it limits the affront to the family legacy that all individuals in family is working hard and hoping to leave. For instance, if an individual with assets totaling to $30 million, they will owe the government estate taxes of over $11 million in ten years and upon their death.
What individuals do not understand is that estate and gift taxes are critical for overall economic development f a nation. As much as wealth and earned success is important, nations need to find a balance between protecting the low income earners and rewarding success. Additionally, the estate tax repeal will help the soaring wealth inequalities in the country (Thompson, 2017). Democratization of opportunities can be attained with the estate tax in combination for tax benefits on low income households.
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Importantly, individuals can manipulate tax exemptions by making timely gifting to reduce estate tax upon their death. For instance, in the case of $30 million, the couple could give out gifts and reduce their estate value to less than $10 million. In ten years and upon their death, they would have saved much of their estate from estate taxes. Importantly, gift taxes can be given in form of charities, buying life insurance, and generations skipping trusts, irrevocable trusts, and adult children. Thus, people need to get extensive details from their attorneys on how best they can handle estate and gift taxes to make the most out of it.
References
Thompson, D. (2017). The Very Bad Arguments for Killing the Estate Tax. The Atlantic
