ELIMINATION OF THE FEDERAL DEATH TAX IS LONG OVERDUE

There are those who would like to make the so-called federal death tax a complicated issue. Republicans in the U.S. House, joined by 65 Democrats, have rightly tossed aside those arguments in the face of a promised presidential veto.

These taxes generate somewhere between 1.5 percent and 2 percent of total federal revenue. And many estates avoid taxation already because of generous exemptions and legalized avoidance. So who winds up paying the bulk of the estate taxes? Those who are really, really rich. Can't they afford to pay this tax?

If, indeed, it is the really, really rich who face the tax man upon death, it also follows that they pay a really, really big tax bill. The highest estate tax rate is 55 percent, and that's a big chunk when the amount being taxes also is really, really big.

Those who oppose elimination of the death tax say really, really rich Americans can afford to pay. And scrapping the tax would have an impact on anticipated federal surpluses. (Surpluses are another topic, of course. How can anyone justify planning big surpluses instead of looking for ways to reduce the tax burden?)

Most taxable estates consist of assets that have appreciated over the years, thanks in no small measure to the business acumen on risk-taking Americans who profited from their investment decisions. At the same time, these business decisions were also creating jobs, expanding markets and contributing to what we loosely call the American dream.

Avoidance of the death tax has become a sizable industry. Instead of eliminating the tax, Congress over the years has authorized mechanisms for escaping the tax. These efforts to avoid taxation are time consuming as well as expensive. And, for many family businesses, the process is divisive, irritating and frustrating.

Those who argue that repeal of the death tax is merely a tax break for the really, really rich ignore an important component of tax fairness. If a tax is onerous to the not-quite-so-rich who currently enjoy exemptions and other breaks, it is proportionately more onerous to those who have to come up with the cash upon the death of a wealthy parent. If fairness is any test, removing the tax and the necessity for all of its cumbersome avoidance schemes is the best solution.

It is unlikely any legislation to repeal the death tax will become law this year. The politics of a presidential election create an atmosphere that pretty much guarantees no final action. But there is hope. Gov. George W. Bush supports repeal of the death tax. If elected, his administration would create an atmosphere of tax sanity at a time when it is sorely needed.

Death taxes date back to the 19th century philosophy that the inordinate wealth of a few should be redistributed to many by way of federal spending. 21st century Americans have opportunities to join the ranks of the really, really rich. Redistribution of wealth is accommodated by a robust economy these days. It's time for death taxes to go the way of indentured servitude.