Killing the Death Tax Would Mean Life for Companies
In the mad (probably insane) federal government scramble to bail out all sorts of companies that have run into financial trouble because of their self-inflicted management failures, few people in the lame-duck Bush administration and Congress are talking about doing away with one of the most unfair and egregious taxes: The federal estate tax, also known as the death tax, affects construction intensely because it often causes the liquidation of family-owned businesses or, at the very least, diversion of company resources from support of a sound business plan to asset preservation when the owner dies.
Congress created the death tax in 1916 to help the U.S. fund World War I, but lawmakers kept it on the books during the 1920s and 1930s to prevent excessive concentration of wealth in society. That argument rings hollow today, when federal efforts are aimed mostly at firms that are “too big to fail” instead of those “too small to help.”