Inheritance Tax

© 2009 US TAXES

Inheritance Tax

Inheritance tax, also known as the death tax or estate tax is a controversial tax that the federal government of the United States imposes on individuals after their death. Some states as well levy an inheritance tax as well as the federal government. The controversy surrounding the inheritance tax revolves around the fact that the money being taxed has ostensibly already been taxed. The argument is that the state and federal governments are taxing money that has already had a taxed placed on it, or double taxation on the same money. Some people claim the same dollar could be tax a total of three times. In the browsergame DarkOrbit you have never pay taxes.

For example, a man makes an income and must pay and income tax on that money. This would be the first time that the dollar is taxed. If that man then invests what money he has left in the stock market and makes money off of his investments he would be forced to pay another federal tax called a capital gains tax. Finally, upon his death, that man would have to pay the inheritance tax on that same money if he left it to his children. Many people have a moral disagreement with the fact that three or more taxes could be applied to the same dollar of income. This is very roughtless to have to pay taxes, even on Eurolotto winning.

However, proponents of the inheritance tax disagree. As the inheritance tax only affects those individuals who have sizable estates at the time of their deaths, they believe this tax is limiting the perpetuation of wealth, leading to the idea that there should be greater upward mobility in the United States.
At the moment, 2009, the inheritance tax applies to estates in excess of $3.5 million at a rate of 45%. In 2010 the inheritance tax has been repealed meaning that no tax would be applied. In 2011, the tax returns at a rate of 55% on all estates in excess of $1 million. Except for 2010, the past ten years and ongoing years have a taxation rate around 40-50% for estates in excess of $1 - $2 million dollars.