The current estate tax was enacted in 1916 to help pay for World War I. Like many taxes, it was meant to be temporary. Initially, the top rate was just 10 percent. It was phased out for one year, However, Congress allowed the rates to increase to 35 percent for 2011 and 2012. If Congress does nothing, the rate will increase to 55% on January 1st.
Missouri Representative Sam Graves says – it’s time to bury the death tax once and for all. Graves says – after a lifetime of building up your farm or small business, the notion that the federal government is owed anything upon your death is outrageous to me. Many small businesses or farms do not have cash to tax, but assets, like machinery or land. Many of those assets have already been taxed once in life. Graves says – death should not be a taxable event.
Graves wants to see families pass down a family farm or business without Washington levying another tax. When a loved one passes away, taxes are the last thing a family needs to worry about. According to a study by the Joint Economic Committee, the Death Tax is the number one reason family businesses do not survive from one generation to the next.