This sounds like the same reason we have a death tax. Those that can’t afford to setup the right paperwork are essentially screwed and have to pay their fair share. Meanwhile those with teams of lawyers have the ability to skirt paying their fair share. Great.
In general, if you can't afford a lawyer to set up paperwork, you won't have enough to trigger the tax, though. The outrage about the inheritance tax is generally misplaced.
And to be fair, that last bit is simply the US tax system: If you can lawyers and accountants, you might not pay much tax. Unfortunately, change requires congressional action and folks working together.
> In general, if you can't afford a lawyer to set up paperwork, you won't have enough to trigger the tax, though. The outrage about the inheritance tax is generally misplaced.
The outrage is that it's a trap for the unwary. Billionaires don't pay it but family businesses who didn't realize they had assets in excess of the threshold do, or people who die young before doing the preparation.
If you can avoid it just by hiring an accountant then it shouldn't exist.
My state taxes inherited out of state real property at an absurd rate (I wanna say 20%, might be 15, in any case, that's a big chunk of change).
In practice it's just a big f you to anyone who's parents live out of state and die owning their home and didn't have the foresight to put it in trust or sign it over to the kid(s) prior to dying.
There is no justifiable purpose for this tax other than revenue. Property out of state has zero cost to the people of the state. It's a pure money grab and it's only affecting the middle class (because anyone who can justify the cost of estate planning will not be subject to this tax).
Edit: I'd be curious to see why people find this comment so disagreeable? Or is it just ideologically inconvenient to point this stuff out?
Gp is talking about at the federal level, where that is indeed the number. You probably had to pay state taxes, those have much lower limits in some states.
Isn't the lower limit on an estate that is subect to estate taxes pretty high? (State rules may differ, but if you're talking about "the death tax", you're probably speaking nationally)
Dying is actually subsidized for people with less than that who have unrealized capital gains, unless I understand the system wrong.
