On Friday, the
House of Representatives cast a historic vote and repealed the immoral estate
tax, better known as the "death tax." Of all the outrageous taxes
Americans are forced to pay each year, the death tax is the most outrageous
of them all. It amounts to government confiscation of American citizens'
property when they die, instead of allowing them to pass a legacy on to their
The death tax
confiscates anywhere from 37%-55% of a person's estate when he or she dies.
That is not only the highest tax rate in the tax code. It is also double
taxation, a tax on already taxed items. People pay federal, state, and local
taxes out of their paychecks for their entire lives. What estate is built
then gets taxed at their death, and their family is forced to pay the federal
The death tax was
originally created as a temporary tax for the purpose of raising funds for war-related
events. It was first enacted in 1797 to pay for the creation of the navy.
After the goal was met, it was repealed in 1802. This happened several more
times to pay for the Civil War and the Spanish-American War, but was repealed
when the conflicts were over. However, in 1916, the death tax became a
permanent fixture in the tax code, and it has been a thorn in the side of
hard-working Americans ever since.
concept of the death tax is not only destructive to families, but is also
extremely harmful to the economy. It gives people less incentive to save and
more incentive to spend because of the relatively high rate at which estates
are taxed. Thus, it results in a disincentive to parents to leave their
children a family business, family farm or their savings. A recent study from
George Mason University found that within eight years of eliminating the
death tax, the gross domestic product would be $80 billion larger than
expected, resulting in 250,000 new jobs.
There are some
who argue the government would lose too much revenue if the death tax were
repealed. First, I object to the notion that money collected from the death
tax is, in fact, the government's money to lose. The money belongs to
American citizens who worked hard to earn it. And another thing that jumps
out at me is the inefficiency of government with regard to collecting this
tax. Three years ago, the death tax raised $20 billion in government revenue.
However, the cost to government of actually collecting the money, combined with
the cost of compliance, amounts to $12 billion. That means the $20 billion
collected by the IRS actually required a $32 drain on the economy. On the
other hand, repealing the tax would cost the government $20 billion, but it
would inject $32 billion into the economy.
In a word, the
death tax is simply un-American. People should not be punished for working
hard their entire lives, creating jobs and wealth for others, and then trying
to leave some of it so their children can have better lives. I applaud the
members of the House who had the courage to cast the historic vote today to
repeal the death tax. Now, I call on the members of the Senate and the
President to support this legislation. The time has come to create a
government that is supportive, not oppressive to the small business owner and
the family farmer. If we put our faith in the American people, instead of the
government, we will increase individual savings, promote job creation and,
most importantly, support the family structure.
other articles by Ron Paul
Ron Paul of Texas enjoys a national reputation as the premier advocate for
liberty in politics today. Dr. Paul is the leading spokesman in Washington
for limited constitutional government, low taxes, free markets, and a return
to sound monetary policies based on commodity-backed currency. For more
information click on the Project Freedom website.
with the authorization of Dr. Paul.
Dr. Ron Paul