Death taxes are any taxes on assets of a decedent that are redistributed to beneficiaries. In the US, it refers to the inheritance tax, which varies by state. Opponents see it as a burden on beneficiaries, while defenders argue it benefits society.
Death taxes are any type of taxation on the assets of a decedent when those assets are redistributed to beneficiaries in accordance with the wishes expressed in a will and statutory will. One of the most common examples of a death tax is the inheritance tax. However, a death tax can take several different forms, depending on the laws that apply in a given jurisdiction.
In the United States, a death tax refers to the incidence of an inheritance tax that the beneficiary must pay as part of the process of assuming control of the property. Closely related is the inheritance tax, which applies taxes to any type of financial asset that is desired for the beneficiary. There is no uniform process for applying the death tax among all states within the Union. Some states have laws that require high taxes on any assets acquired as part of an inheritance, while other states require modest taxes. Still other places in the United States do not require any type of death tax.
The use of a death tax has long been a matter of controversy in many parts of the world. Opponents of the death tax believe the process places an unnecessary burden on beneficiaries during a period of mourning. There is a high probability that the individual is grieving or possibly dealing with end-of-life expenses associated with the death of the friend or family member. In some cases, the tax burden may be so great that the beneficiary cannot pay the taxes without selling the inherited property, creating an ethical dilemma where the recipient of the property cannot enjoy it in the manner intended by the decedent.
Defenders of the death tax tend to point to the need to provide for the greater good of society. This includes increasing revenue for federal and local governments that can be used to maintain and increase public services that all citizens can enjoy. From this perspective, the death tax is seen simply as an aid in that process. Since the beneficiary receives assets that he or she did not earn and have not previously paid taxes, proponents say it simply makes sense to tax those assets so that the greater good of the population is served.
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