Accountant Unwittingly Makes the Case FOR Death Tax Repeal

From the New York Times’ letters section — (fourth letter; may require registration; HT Taranto of Best of the Web):

As a financial adviser, I spend much of my time helping clients decide how to handle their estate tax liability.

….. It’s not that hard to structure an estate to avoid the tax. That’s what the thousands of accountants, lawyers and financial planners do.

From my perspective, the estate tax is purely optional. So repeal is unnecessary except for the uninformed, the unfocused or those people who are unwilling to pay their financial planning team a little more to make the tax go away or be reduced.

People pay their professionals to avoid lots of income tax legally, and they do it every year. Why is it so hard for them to pay a little every few years to review the estate plan and avoid much or all of the estate tax?

This perfectly explains why the death tax SHOULD be repealed. How much tax is paid on a person’s wealth when he or she dies shouldn’t depend on whether or not you have availed yourself of the estate-planning industry. Financial planners could be helping their clients build their wealth instead of expending time, energy and endless documentation to avoid having it taxed. There’s no shortage of help needed out there in doing the former, if only financial planners and lawyers would lose their love affair with the latter (and death tax repeal would let them).

Repeal of the tax, or reducing its scope to paying capital-gains tax on actual gains at time of death, would be a win-win. Planners could better serve their clients or move on to work that adds value in other areas or accounting, investments, or the law. And as noted previously, it is probable that neither strategy (outright repeal or capital-gains treatment) would result in a loss of revenue to the Treasury; in fact, the more likely outcome would be MORE revenue.