A family works a lifetime to build up their estate and then pass it on to their kids, only to find that the government gets most of the money. Worse, many children who inherit a farm or small business have to sell it in order to pay the government.
Maybe that’s why 90 percent of small businesses fail after the death of their founder. And only 30 percent of family farms pass from one generation to the next. That’s why Congress has been trying to pass legislation to phase out and eventually end the inheritance tax.
The concept goes back to socialist, egalitarian impulses that lamented that some rich families were accumulating too much wealth and passing it on to their heirs. Congress implemented the inheritance tax not only for social reasons, but for economic reasons. The federal treasury grows each year from inheritance taxes.
Savvy estate planners can avoid much of this taxation, but many families are unaware of their financial options or postpone tax planning too late. As a result estate taxes can claim up to half of a family’s inheritance.
Although some in Congress worry about the loss of tax revenue, new studies indicate that it would actually benefit government and the economy. If Congress eliminates the tax, it would add $11 billion to the economy and create 1.4 million jobs over the next 10 years.
Now is the time to implement this legislation. We are in the midst of the largest transfer of wealth ever in this country as the parents of baby boomers transfer what is estimated to be about $10 trillion in wealth to the baby boom generation. Now is the time to ease the pain of that transition and to aid the economy.
I’m Kerby Anderson of Probe Ministries, and that’s my opinion.
© 1999 Probe Ministries International