On April 13 the US House of Representatives voted to repeal the estate tax, commonly known as the Death Tax. In the bog The House Votes to Increase Income Tax it is explained how the action will lead to higher income tax on middle income Americans in the near future. The repeal of the estate tax will decrease government revenue, and income tax will have to be increased to take up the slack. An increase of $40 to $50 billion will be required to fill the gap. It may not happen immediately, but someday the government will have to make up the monetary difference.
Is the government simply rearranging taxes instead of cutting them? The blog states that this is but one more example of Republicans reducing the taxes on the rich and increasing them on the poor. How will the economy respond to this tax repeal? I guess we might find out sooner than expected.
1 comment:
-1 on June's post for spelling errors.
Angry Bear, the author of the blog that June cites, tends to have a lot of anger directed at Republicans (who passed this law).
That's fine.
What isn't fine is to make the non sequitar that a cut in the "death" tax must be paid for by taxes on the poor. That may end up being true, but it isn't a valid assumption to criticize the repeal of the "death" tax.
In some sense, the "death" tax is already a tax on income - just income that was earned a long time ago, and saved, invested, and profited from.
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