When you are a child you tend to think that everything adds up and the world is supposed to be fair, and you are guided by your parents to develop a firm sense of right from wrong. Any attempts at convoluted logic on your part to defend questionable actions are met with dismay by your parents and teachers. But for the most part the ability to discern whether or not something is equitable or fair does not take a great deal of nurturing because it is something that is rather innate; perhaps it is intimately connected to the conscience.
When you become an adult and get out into the “real world” you recognize that life is not always fair, but your own sense of conscience still remains. All of this is relevant when you examine the estate tax because it is something that really flies in the face of everything that we are taught about how we should approach our working lives and financial aspirations.
Success is what you strive for, but as you are achieving it you pay maybe 40% or more of your income in taxes. This can go on for 30, 40, even 50 years. You also pay sales tax on everything that you buy, capital gains tax, property taxes, and so on.
After paying all of these taxes all your life it is challenging to be industrious enough to turn the remainder into some reasonable modicum of wealth. Under the laws as they stand now if you are able to do so the federal government will take 35% of the taxable portion of your life savings after you pass away. This is in addition to the estate taxes that will be levied by the state of New Jersey.
Fortunately some genuine easing of this extraordinary tax burden may be in the offing. H.R.143, H.R. 177, H.R. 123, H.R. 86, and H.R. 99 have all been introduced to the House of Representatives and all five of these bills call for a repeal of the estate tax. So be advised when you articulate your displeasure about losing more than a third of your legacy after you pass away that yours is not a voice reverberating without heed in an empty wilderness.
- Estate Planning: Understanding the Roles of Executors and Trustees - November 25, 2023
- Understanding the Veterans Pension for Seniors - November 20, 2023
- Ring In the New Year With an Estate Plan Review - November 8, 2023