The Tax Foundation’s polling has found, not surprisingly, that the death tax is perceived as being the “worst tax — that is, the least fair.”
At present, the government can seize 35% of everything above $5 million. But, Senate Democrats want to hike that up to 55% of everything above $1 million, beginning on January 1, 2013. Keep in mind that because this $1 million is not indexed to inflation, over the course of time this tax would impact almost anyone who achieves a modicum of financial success and would like to pass it on.
In many cases, family businesses will have no choice but to shut down when the founder dies–just to pay the tax bill.
Douglas Holtz-Eakin, former Congressional Budget Office (CBO) director, said that the Democrats’ 55% death tax would destroy in the neighborhood of 1.5 million small-business jobs. That would be on top of an already weak economy.