Tax Analysts Blog

How Old Was the Estate Tax When It Died?

Posted on Jan 7, 2010

Over at the Huffington Post, Chris Kelly did a nice little send-up of the estate tax debacle. Taking his cue from the untimely death of baby-oil heiress Casey Johnson, Kelly points out that Johnson's fiance, Tila Tequila, will at least be spared a tax bill.

    This may shock you, if you think you live in a free country that respects private property and honors honest work, but if Casey Johnson had died last week, her fiancée, the future Mrs. Tequila -- Johnson, would have had to pay onerous confiscatory taxes on her hard-earned inheritance. Well, not the first $3.5 million. But after that.

    Why even bother being born rich, or marrying money if the government's just going to take it?

Kelly's sarcasm -- directed squarely at the pathetic Democratic majority on Capitol Hill -- is richly deserved. But I feel compelled to point out that Kelly gets his history wrong. "Your Congress couldn't muster the nuts to not repeal a tax on the super-wealthy that had existed in its present form since 1934," he writes. Well, in fact, the tax has existed in pretty much its present form quite a bit longer than that: since 1916, to be precise. Sure, Congress made a few changes in the 1920s and early 1930s. But the estate tax is damn near a century old. Even Andrew Mellon -- who hated the tax with a particular passion -- couldn't get rid of it during a decade of GOP dominance.

Don't take my word for it: the IRS has published a reasonably brief history of the tax.

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