The federal estate tax, better known by its more accurate moniker the “death tax,” is poised to rise to 55 percent with just a $1 million exemption in 2013 should we fall off the “fiscal cliff.” Today, the death tax is 35 percent with an exemption over $5 million. While lower than what it could be next year, this is still too high.
A death tax at any rate is unfair, because it robs families of businesses they have built over a lifetime.
Take Bruce Nevis, owner of Grand Harvest Wines, for example. When he dies, his family could be forced to sell the business he and his son built together. He resents the idea that his son Jeremy will be getting “something for nothing” by inheriting his business. Jeremy has worked on the family business every day, even before the company had officially opened.
Mr. Nevis has been saving his money to pay the death tax—money that could have been used to expand the business, offer more products, hire more employees, and raise salaries. Even businesses worth a few million dollars do not necessarily have the money to pay the death tax, and many are forced to sell. It’s actually the government we should be worried about getting “something for nothing.”