On Wednesday afternoon the White House again proposed eliminating the so-called death tax as part of its tax reform plan, but the details remain sparse. When pressed for specifics Director Cohn simply stated that with the implementation of the administration’s tax plan, the death tax would disappear.
The phrase “death tax” entered the popular lexicon by way of tax reformers wanting to summarize and caricature the several parts of the Federal transfer tax system.
What is the Death Tax?
The death tax could refer to the estate tax alone or to any combination of other taxes that grew out of the estate tax regime. The modern estate tax was introduced in 1916. In its current form it imposes a top rate of 40% on transfers above $5,490,000 per person made at death.
After the estate tax was instituted, savvy taxpayers quickly realized that a deathbed gift would avoid the estate