Outdated death tax unfairly punishes family businesses

Wait, some may say, doesn’t the death tax just affect the superrich? Hardly. The tax has destroyed countless family-owned businesses over the years.

growth. Since businesses have less funding, they’re less able to purchase new tools and equipment. So workers are less productive and suffer slower wage and salary growth.

The death tax also hammers some Americans more than others, since it especially targets landowners. Millions of farmers, ranchers and homeowners have improved their land. Yet when they die, the federal government punishes their heirs.

“The family could have used the cash that goes to pay the death tax to add new workers, pay higher wages, or increase benefits,” writes tax expert Curtis Dubay.

Who benefits from the death tax? Estate tax lawyers. Life insurance companies. Large businesses — and, of course, big government. Outside of these groups, there’s no justification for it.

It was created a century ago to help fund World War I and as a way to prevent the build-up of wealth in a small number of families. “The death tax serves neither of these purposes today,” Dubay writes.

And let’s not forget how the death tax contributes to big government. As Jim Martin, founder of the 60 Plus Association, has pointed out, it has been enacted four times in our history, and each time as a “temporary measure” — in 1797, 1862, 1898 and 1916. The first three times, Congress promptly repealed it once war had ended. But after World War I, it stayed in place. Meanwhile, Congress started spending money at a precipitous rate.

Here’s hoping Congress can help President Trump drive a stake through the heart of the death tax — and let the economy benefit from its permanent demise.

Ed Feulner is president of The Heritage Foundation. He wrote this for Insidesources.com.