Under a current proposal in Congress is the elimination of the estate tax while

Question

Under a current proposal in Congress is the elimination of the estate tax while retaining the gift tax rules. Proponents of the estate tax says it allows the wealthy to create multi-generational wealth which does not benefit the country economically. They also argue that it creates family empires. Opponents of the estate tax claim that paying the estate tax causes many families to have to sell family businesses in order to pay the estate tax and that in most cases taxes have already been paid on the accumulated wealth that is being passed on. Describe your position on the estate tax and why it should be maintained, increased, decreased or eliminated according to your beliefs.

Explanation / Answer

Estate tax is one of sources from which the Government collects revenue. In fact it is one of the significant sources of revenue for the Government. Thus, the proposal of abolishing estate tax entirely will adversely influence the revenue collection of the Government. Hence, there is no question of abolishing the tax completely. However, there is no questions about its effects on wealthy people and the hardship that often they have to face to pay estate taxes on their estate. Thus, the proposal of reducing the rate of estate tax and consider special cases where the estate owners are not in position to pay high amount of such taxes to wave or reduce their liabilities would be helpful to the estate owners. Thus, it should be maintained after necessary modifications to be considerate to the interests of all stakeholders of estate tax.

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