What's the "Death Tax (Estate Tax)"?

What's the "Death Tax (Estate Tax)"?

John Stoller, CPA (Certified Public Accountant) gives expert video advice on: What are "income taxes"?; What is the "IRS"?; What are "tax-favored investments"? and more...

The death tax is really a misnomer. There is no tax on death. There is a transfer tax on the passing of estates from one generation to the next, or the next, and the next. The purpose of this was set up years ago to prevent enormously wealthy people from transferring their estates on to future generations. It would've created a class of extremely wealthy people, and that's not really our democratic concept. Now, if someone dies, the first million dollars that they leave is not subject to any tax at all. The idea that small businesses are going to benefit from the repeal of the "death tax" is a foolish analogy. Small businesses aren't going to pay death taxes. It's easy to do succession planning for a business, say that's worth even five or 10 million dollars, to pass it on to the next generation or the very minimum amount of taxes.