GOP Bill to Repeal Estate Tax

* Robert McElvaine’s Aug. 27 commentary, “The Democrats May Inherit a Windfall,” comes to several false conclusions. Most of the estates that are subject to these unfair taxes are the result of people working hard to accumulate money to provide for education for children and/or grandchildren. Perhaps to make it a little easier for the lives of their families, etc. This is good, old American incentive, to reach goals such as these. If we take away incentive, why knock ourselves out to accumulate?

In most cases these moneys have already been taxed, so we are talking about double taxation. The really wealthy pay for access to top tax accountants and lawyers, enabling them to utilize the most sophisticated methods to avoid taxes. The marginally wealthy, I believe, are the ones most affected by this unfair estate tax.

PAUL ALLEN

Palm Desert

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The commentary was well done--as far as it went. However, the factor not emphasized enough is that the Republican proposal would eliminate the stepped-up basis rules that prevent small estates from being taxed. For example, an heir who receives his or her parent’s home and some stocks would ordinary not pay inheritance taxes if the value was less than $675,000. But the Republican plan would have the heir pay tax on the increase in value from what his or her parent paid for the house and the stocks. For a house that cost $50,000 originally and is now worth $350,000, that “profit” of $300,000 is taxable by the Republicans, as would be any increase in the stocks’ value.

So middle-class taxpayers would be caught in a trap they haven’t been informed is lurking in the “anti-death tax” legislation. Even if a taxpayer used the $250,000 profit exemption on a home sale, he or she would have to live in the house for two years to use it, while the taxes on the “profit” would be due immediately.

CURT FEESE

Covina