Eric Schansberg recently penned a very sensible article on the delerious effect the "death taxes" have, punishing thrift and investment, and limiting the ability of one who passes on to exercise fully their right to give what's theirs to whomever they choose.
Where Schansberg surprised me is on his charge that these taxes greatly affect the poor.
It has been said that the only sure things in life are death and taxes. It seems that Democrats are fond of combining the two-- especially for the wealthy and the working poor.Schansberg's article at the Libertarian Writers Bureau.
I'll be looking forward to making a campaign issue of the death taxes in Indiana. I was astonished to learn that my home county, Hamilton County, has a division of the Assessor's Office that does nothing but oversee the appllication of Indiana's death tax! From the County's website:
The Hamilton County Assessor’s Inheritance Tax Division's main function is to determine the Indiana State Inheritance Tax liability of each heir or beneficiary in a decedent’s estate. The Indiana inheritance tax is not a tax on the property itself, but on the transferee’s (heir’s) right to receive or succeed to property.The transferee's right to receive the property? Wow. Correct me, but this is the United States of America, right? There's more:
The tax is imposed at progressive rates with exemptions decreasing and the rates rising the more distant the relationship of the decedent to the recipient of the property.So, if I want to leave my money to my son, it's taxed at lower rate than if I leave it to my grandchildren for their college education. What kind of bone-headed policy is that? If I want to leave it to my best friend, who is no blood relation to me, it is taxed at the higest rate. Likewise if I leave it to charity or a church, which is again no relation to me. No wonder elderly people move to other states.
This is stupid law. Stupid policy. Some wonder why there's a brain drain in this state.
Here's an idea- let's make Indiana a wealth magnet by repealing the death taxes. Let's attract people with means rather than send them away.
3 comments:
I will have to look into this some. I did not know that you piad a different rate depending on how you are related to a person. That is insane...
You interpreted the quote from the county's website as meaning that if you leave your money to your son it is taxed at a lower rate than if you left it to your grandson. Under the current law, all transfers to lineal descendants and ancestors receive a $100,000 exemption and the tax begins at 1% on amounts above that. You were correct that leaving it to your friend would be taxed at the highest rate ($100 exemption, 10% rate). However, any amount left to charity is totally exempt from the tax.
Thanks for the clarification. Good that charity is untaxed at death! Good that there is an exemption on lineal survivors, but bad policy that there is a 1% tax at all. And still, if I intend to leave my money and worldly possessions to a friend, I'll be departing Indiana before I depart this earth to escape that 10% rate.
The point remains: Indiana could do better. Indiana could and should become a wealth magnet.
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