Business

DEATH TAX FACE OFF

The so-called death tax is scheduled to rise to 55 percent in four years – when the exemption will drop to $1 million from $2 million – and up to now the national dialogue on its fate has been pretty much one-sided.

Billionaire investor Warren Buffet, the country’s second-richest person, has been the poster child for the tax’s legitimacy and the loudest voice pushing for the tax to stay in place.

Well the battle has been joined.

Earlier this month, the debate turned into a celebrity smack down after actor and TV personality Whoopi Goldberg ranted on national network TV about the death tax’s inherent unfairness.

“If I give something to my kid and I already paid the tax, why do I have to pay it again because I died?” Goldberg asked on ABC-TV’s “The View,” where she serves as a co-host.

The rant drew national attention and refocused a debate on not only the different levels of the tax – which President Bush has cut but which is scheduled to return to its pre-cut levels – but on whether or not it is fair.

The estate tax, renamed the death tax by opponents, currently taxes all assets in your estate over $2 million at 45 percent. Spouses are exempt.

The $2 million amount includes your house, your retirement accounts and your investments and savings. It is affecting more and more Middle Class families – and will explode onto the front burner for millions more families in 2011 when the exemption drops and the rate rises.

Indeed, last year, there were 49,050 estate tax returns nationwide, according to IRS data. The Americans for Tax Reform estimates that around 100,000 will file an estate tax in 2011.

Even at that rate, Buffett claims, only one in 200 families will have to pay it.

That does little to mollify its critics.

“The death tax is really a gut test of your view on envy,” said Grover Norquist, president of Americans for Tax Reform. “The opponents don’t think a person who works hard on Saturday, or becomes successful, should be taxed.”

The government enacted the estate tax in 1916 to help fund World War I. Washington will ring up revenue of nearly $400 billion in 2011, according to estimates.