• 81°

Estate tax isn’t a new invention

RALEIGH — It is a debate that has been going on for a long time.
In fact, politicians were arguing about it during the nation’s founding.
Estate and inheritance taxes have always prompted bitter words.
On one side are those who see the taxes as dual taxation, an unfair levy on the sweat of those who spent a lifetime working and saving. They argue that the tax forces families to split up family businesses and family farms.
Supporters of the tax argue that only larger estates are affected, and only a fraction of estates are ever subjected to the tax.

Today, the Republican-controlled General Assembly is looking at getting rid of the tax, more than a decade after dropping a separate inheritance tax.
The difference between the two is that the estate tax is applied to the estate before it is distributed among heirs; the old inheritance tax applied to the individual inheritances of the heirs.
Current state law applies the estate tax only on estates valued at more than $5.25 million. The tax ranges from 0.8 percent to a maximum of 16 percent for estates over $10,040,000.
The tax pulls in $52 million a year, which is a drop in the bucket of the state’s $20 billion general operating budget.
Still, those state lawmakers who favor rescinding the tax might be a bit surprised about how our forefathers saw this business of taxing estates.
A 1784 North Carolina statute found that abolishing some forms of inheritance would “tend to promote that equality of property which is the spirit and principle of a genuine republic.” Keeping large estates together for several generations would give some families “unequal and undue influence in a republic.”
In other words, these folks didn’t want North Carolina to turn into merry old England, with its landed aristocracy.

That radical Thomas Paine went further. He proposed an estate tax that would be applied, not to raise money for the government treasury, but to be redistributed to all citizen at age 21.
Estate taxes became an especially hot topic during the Progressive Era, as robber baron-types amassed huge fortunes.
By then, supporters of the tax touted it on moral grounds. In their minds, inheritances undermined the national work ethic. (It is an interesting idea in light of current-day arguments that the tax itself penalizes frugality and the work ethic of those amassing the estate.)
One of those famous robber barons, Andrew Carnegie, wrote, “The parent who leaves his son enormous wealth generally deadens the talents and energies of the son and tempts him to a lead a less useful and less worthy life that he otherwise would.”
Teddy Roosevelt made similar comments.
When Congress considered, and finally approved, the federal estate tax in 1916, opponents had a different take.
One Nebraska congressman noted that if supporters “cannot reduce the cost of living, they demonstrate to the public their ability to raise the cost of dying.”
Others called it class warfare.
Somehow, this all sounds kind of familiar.

Scott Mooneyham writes about state government for Capitol Press Association.

Comments

Comments closed.

Local

Three Rivers Land Trust finalizes deal to double size nature preserve in Spencer

Local

Spin Doctors announced as headlining band for 2021 Cheerwine Festival

Ask Us

Ask Us: Readers ask about Hoffner murder case, ‘Fame’ location

Local

Cornhole tournament at New Sarum Brewery brings out Panthers fans, raises money for charity

Crime

Blotter: Salisbury man charged for breaking and entering, burglary tools

Nation/World

Senators race to overcome final snags in infrastructure deal

Crime

Child killed in Monroe drive-by shooting; 1 arrested

Local

Rowan County Chamber of Commerce’s Dragon Boat race returns after year hiatus

Local

Marker commemorating Jim Crow-era lynchings in Rowan County, racial injustice required years of work

Local

Identified Marine was a Salisbury native, served in WWII

Coronavirus

Rowan County sees COVID-19 cases coming more quickly, remains in middle tier for community spread

Cleveland

Cleveland plans to build walking trail, community barn quilt mural

High School

High school athletics: Male Athlete of the Year Walker in league of once-in-a-generation players

Business

Young entrepreneur learns lesson of responsibility by raising quail, selling eggs

Lifestyle

Historic McCanless House sold, buyers plan on converting home into events venue

Lifestyle

Library’s Summer Reading Week 10 has virtual storytime, last chance to log hours

Coronavirus

Positive COVID test knocks DeChambeau out of Olympics

College

College football: North grad Delaney ready for next challenges at Johnson C. Smith

College

Fishing: Carson grad Bauer signs with CVCC

Business

Biz Roundup: City of Salisbury brings back in-person community resource fair

Nation/World

States scale back virus reporting just as cases surge

Nation/World

Wildfires blasting through West draw states to lend support

Nation/World

French protesters reject virus passes, vaccine mandate

News

State briefs roundup