Tax Analysts Blog

Of Death, Taxes, and Death Taxes

Posted on Nov 11, 2009

A couple of weeks ago, the blogosphere saw a flurry of indignation over the notion of "death taxes." Here at tax.com, Chris Bergin chastised Rep. Sam Graves for his insistence that "death should not be a taxable event." Elsewhere, Brad DeLong, Stan Collender, and Linda Beale also took aim at this not-so-new political neologism.

The critics point out -- correctly -- that the federal estate tax does not, in fact, tax death. Rather, it taxes the transfer of an estate. Efforts to rename the levy are clearly political, designed to build support for its permanent repeal. Beale makes the case succinctly:


    the use of "death tax" is an attempt to use emotions about death to move people to hold particular positions about the tax.  And there's no such thing as a tax on death--death is not taxable income.  What is taxed is the estate left by the decedent to heirs or beneficiaries who did nothing to earn it.  So estate tax is the correct name, and death tax is a manipulative play on words.

Fair enough. And let me stipulate, as I prepare to irritate every estate tax supporter out there, that I like this tax. A lot. Left to my own devices, I would keep a robust version of it on the books for good.

(Though not, perhaps, as robust as some. I think sagging support for the estate tax reflects, in part, its slow creep down the income scale in the late 20th century. Higher exemptions are a must. How much higher? I'll leave that argument for another time.)

Arguments against the "death tax" terminology have always seemed a bit strained to me. As Bill Ahearn noted in a response to Chris's post on this site:
    "Death tax" is not such an outrageous nickname for the federal estate tax. After all, an income tax liability is triggered when you earn; a sales tax liability is triggered when you make a sale; and an estate tax liability is triggered when you ___. It seems that champions of estate taxation want to skip over the death part for the same type of public relations reasons that Rep. Graves wants people to say "death tax" instead of the legally correct "federal estate tax."

In other words, "death tax" makes sense in a colloquial sort of way. And when estate tax fans argue passionately against it, they do their cause no favor. They are offering a legal and intellectual response to a political and emotional argument. Good luck with that.

It's worth recalling that long before GOP pollster Frank Lutz ostensibly coined the death tax slander, the term was in regular use by reputable tax experts -- including fans of the estate tax. Even back in Franklin Roosevelt's day, when Treasury economists were endorsing the upward march of estate tax rates, they routinely described the levy as a "death tax." Take a look.

Of course, the meaning of a word or phrase varies across time. When FDR's economists used the term death tax, it carried no political baggage. Today, it's freighted with a heavy load, indeed. So I'm not suggesting that liberals embrace the death tax terminology. I'm just proposing that they stop fighting it so hard. By harping on the terminology, they are engaging estate tax opponents on their chosen terrain. That's never a good battle plan.

Look, the anti-estate tax folks scored a win when they revived the death tax terminology. Good for them. But the battle for the estate tax should be won on its merits, which are easy to articulate. The battle over terminology is a distraction.

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