Estate Tax Research Paper

Chris Calnan

College Writing

Professor Jones

December 14, 2015

The Estate Tax

The estate tax is a tax levied upon the transfer of assets that follow an individual’s death. It has come to be known and referred to by many as the death tax. The tax solely targets the richest citizens in the United States and the passing of their wealth to others. Similarly to the progressive income tax, the estate tax rate increases based on the value of an individual’s taxable estate. Morality and political beliefs fuel the highly controversial debate on the estate tax. There are two main questions raised by this tax. One being the tax’s overall effectiveness and the other being the fairness of the tax to those it’s imposed upon. All the issues that surround the controversial estate tax law boil down to one simple question: should the estate tax remain in existence?

The estate tax was first created by the Revenue Act of 1916 in an attempt to assist the United States effort in World War I. At the conclusion of the war the estate tax remained in effect and was reformed in 1976 by Congress to create the modern day system for tax. The Tax wasn’t reformed again until 2001 by the signing of the Economic Growth and Tax Relief Reconciliation Act by George W. Bush that reduced the estate tax by 10% in 2009 and repealed it completely in 2010, but upon the act’s expiration in 2011 the tax was restored to its previous rates. During the year of repeal President Obama signed a temporary two-year return of the estate tax with an exemption level of $5 million and rate of 35%. These new terms for the estate tax were reached upon a compromise between the President and Congressional Republicans.

The majority of support for the estate tax comes from the Democratic political party. Supporters believe that the estate tax should maintain a low exemption level and a high taxation percentage for the estate tax. The first argument in support of this view is the existing income inequality in...