Defending the Death Tax - It's a Paris Hilton Tax

The tax that the federal government and most states place on estates after death is some times referred to as the "Death Tax". Why do opponensts of the tax like to call it the Death Tax? Because of the spin it puts onto the issue. With the title arises the implication that, even after death, once the Grim Reaper departs the next knock at the door will be the tax man.

(See here) a National Public Radio (NPR) audio clip where Patrick Murphy, Democratic candidate for Pennsylvania's 8th District refers to the tax as the "Paris Hilton Tax" during a campaign debate.

Beautiful. Let me add my clapping hands to the applause and chuckles Mr Murphy should be receiving for that one!

Let me attempt to put my own spin on the "Paris Hilton Tax". The tax is not on Mr (or Mrs) Hilton, after all, since once they are dead and gone, they can't take it with them. The tax is on snot nosed rich kids like Paris Hilton who did nothing to earn the money, that only get the money due to being born with a silver spoon in their mouths.

One of the most persuasive arguments that opponents of the Paris Hilton Tax have is that family farms are having to be sold to pay the tax. However back in 2001, the American Farm Bureau Federation (which opposes estate taxes) could not provide a single example of where an American family farm had to be sold to pay the federal estate tax. (However it is important to differentiate between the federal estate tax and some states' estate taxes; unlike the federal tax which only kicks in on estates valued in the millions, some state estate taxes kick in after only a few hundreds of thousands.) However, even the federal estate tax could come into play for certain "family farms" on the outskirts of large cities. For an example of this, one only need drive around the outskirts of Chicago and Cook County in Illinois. I could imagine that where some farmers still continue to attempt to farm in the face of urban sprawl, their property value could indeed now be valued in the millions of dollars. However, by only increasing the value at which the federal estate tax kicks in to a higher level (I suggest $10 million) even this "problem" could be solved for all but the most extreme circumstances. Increasing the value to $10 million across the board would also offer relief to "small" family businesses which conduct business in areas other then farming as well. Even in an extreme case where the small "family farm" is threatened due to urban encroachment, the "family" could always sell the farm to developers, pay the tax, buy another farm in a more rural area (where farming might also be more appropriate anyway) and still have a tremendous wad of cash left over for new combines, a new "family farm McMansion" (complete with in ground swimming pool), or whatever.

The Paris Hilton Tax does not threaten the family farm! The Paris Hilton Tax is a tax on snot nosed rich kids.