Estate Tax

* I’m not sure who Max Sawicky is (“Who Wants to Stay a Millionaire?” Commentary, July 3), but it looks like he never met a tax he didn’t like, particularly the death tax. He uses phrases like “wealth” and “millionaires,” overlooking the large number of middle-class people who own some California real estate and have a 401(k) who are becoming, if they are not already, millionaires. In fact, we’re turning into a nation of middle-class millionaires!

When we hear about the “wealthy,” perhaps Sawicky is defining the very wealthiest Americans as those who earn more than $35,000 a year. Is the death tax double taxation? Yes, it is. Is it unfair? Yes, and it’s looking unfair to more and more people, which is why even Democrats support eliminating it.

RICHARD SHILLING

Pacific Palisades

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Just one of the so-called “myths” of the estate tax that Sawicky exposes in his commentary is that of double taxation. Does Sawicky believe that in the beginning God created stocks, bonds and business interests and then doled them out as he saw fit? Mr. Sawicky, they had to be purchased.

If one earned $50,000, paid tax on those earnings and used the remainder, say $30,000, to purchase stock and that stock appreciated to $35,000, what would happen if that person died and the $35,000 in stock was subject to the estate tax? Of course, the full $35,000 would be taxed, $30,000 of which had already been taxed. Double taxation a myth? I don’t think so.

DALE LEWIS

Orange

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Sawicky’s comprehensive statement only omitted one important benefit of the estate tax: It encourages members of the older generation to keep money active and in circulation by permitting tax-free gifts during their lifetime. These tax-free gifts, amounting to $10,000 per person per year, have subsidized many college educations of grandchildren and many houses and businesses of children. In fact, too many of our so-called “sandwich generation” do not get to inherit until it is too late to enjoy. Some of us are blessed with generous parents; others, alas, with those who want to hold on to every dime.

The estate tax was created in part to accomplish two things: the circulation of money as an impetus to strengthening the economy; and because, if you have to tax someone, it is best, if we really believe in an egalitarian society, to tax the dead rather than the living.

Lastly, current proposals do not permit a stepped-up basis for capital gains, which would be a burden on small estates rather than just the large. The proposal should be defeated as a step backward for the rich and the less-rich but thrifty citizens.

IRYNE C. BLACK

Newport Beach