A report published today by Citizens for Tax Justice, a nonpartisan research and advocacy group, gives us the latest figures from the IRS on how many deaths in Minnesota led to estate tax liability: In 2007, just 221 estates in Minnesota owed any estate tax. Doesn’t sound like too many? That’s because it’s not – it’s less than one percent of all estates in Minnesota (0.6%, to be exact).
But the fact that the estate tax only effects the highest of the high-income taxpayers isn’t why it’s a tax worth keeping. The estate tax makes good sense because it asks those people with great wealth to contribute their fair share. To quote the CTJ report:
“A society whose government provides the goods and services necessary for wealth-creation must decide how to pay for them, which means we must decide what to tax. We have decided to tax income from work through the federal income tax and payroll tax, which the vast majority of Americans are familiar with. If we tax earnings from work, it would seem only fair that we also tax transfers of large fortunes to those who do not need to work because of the enormous wealth of their families…If the families who pass huge fortunes down through successive generations are no longer asked to help pay for the goods and services that make such wealth possible, then surely Americans will question whether ours is truly a country where hard work counts more than a family name.”
As CTJ points out, this idea is not new – it goes back over a hundred years to Rockefeller and the President Theodore Roosevelt. The estate tax is worth keeping (for more information on the estate tax, read our issue brief on the subject).