Tags: Landsburg | Death | Tax

Landsburg: How Death Tax Hurts Everyone

Tuesday, 01 Nov 2011 09:00 AM

Economist Steven Landsburg says the death tax hurts all of us, especially the poor.

"We're all living on other people's inheritances and investments in our economy. Just five generations ago, the average American worked 60 hours a week, took no vacations, and earned less than the modern-day equivalent of $6,000 a year," Landsburg writes in The Wall Street Journal.

"He or she rarely traveled more than a few miles from home, had no central heat or running water, and died at age 50."

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The death tax sends a powerful message to rich people, says Landsburg: You can't leave everything to your heirs, so spend now, before it's too late. Burn more fuel. Demand more timber for your mansions, more steel for your private planes, and more fiberglass for your yachts.''

Then all those resources—the fuel and timber, the steel and fiberglass—become unavailable to build factories, so the rest of us get worse jobs at lower wages, Landsburg notes.

"Those resources are unavailable to build farm equipment, so we all pay higher food prices. They're unavailable to build roads and schools and hospitals," he says.

"I don't begrudge anyone the fruits of his labor. But the death tax encourages people to pick extra fruit, leaving the trees a little barer for the rest of us."

The Raleigh News-Observer reports that, according to a new poll conducted for The Civitas Institute, 66 percent of North Carolina voters are opposed to the state’s death tax, which takes up to 16 percent on assets above $5 million including businesses, homes and other assets when a person dies.

That is in addition to the 35 percent federal estate tax.

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