Estate Tax Gets a Lot More Attention Than It Deserves
The levy is portrayed as a big threat to family businesses and farms, though almost no one pays it.
Bloomberg, April 10, 2019
Chatting recently with a politically active friend on the left, I was surprised when she mentioned her objection to the estate tax for “obvious reasons.” This discussion was instigated by a column in the right-leaning Washington Examiner, which wrote that “the death tax was the grim reaper of family-owned businesses,” an argument often invoked by those opposed to the levy.
Describing herself as “wealth adjacent” — she stands to inherit family money — my interlocutor joked that efforts to eliminate the “death tax” was the only thing Trump had gotten right. It’s funny how a proximity to a fortune can change one’s political perspectives.
Regardless, it is surprising that anyone would be concerned about the estate tax. Of all the tax issues to worry about, this one should be at the bottom of your list. The exemptions are high, and the ways to legally avoid the tax are well-known and relatively cheap, if a bit complicated.
For most families, the only excuse for paying estate tax is getting hit by a bus on the way to the attorney’s office to sign the paperwork. Other than that, it is a nonissue for almost all Americans.
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I originally published this at Bloomberg, April 10, 2019. All of my Bloomberg columns can be found here and here.
