Whoopi Goldberg thinks she sees something called a 'death tax,' the same way she saw phantoms in Ghost. Ghosts may or may not be real, but there is no such thing as a "death tax." Like many wealthy people, Whoopi uses this artificial phrase to complain about her inability to give as many tax-free millions to her children as she would like.
Whoopi's kids will pay tax on their unearned income. That's an inheritance tax, not a death tax. And even though they've done nothing to deserve it (except for having a rich parent), they'll receive much more favorable tax treatment that regular people get when they work hard for their money. They'll be able to enjoy their first $2 million of inheritance absolutely tax-free.(1)
Why, you may ask, do wealthy children get a tax break that others don't? Because our country's lawmakers have traditionally favored the idle rich over working people. Whoopi, I think you understand that. And while everybody understands the desire to leave our wealth to the children we love, hardworking Americans aren't really happy about the 'tax-free' part.
This "death tax" phrase was designed and marketed by conservatives to confuse people into supporting the idea that rich kids shouldn't pay any tax at all on their unearned multi-million dollar income. And it won't go away. I saw a headline the other day that read "Dexter: Let's drop death tax." I thought it was referring to the serial killer on TV named Dexter. If he paid taxes for every victim he murders, that would be a "death tax."
(Actually, "Dexter" is a Canadian politician who's using the phrase for its intended purpose, which is to confuse voters.)
"If I have to give something to my kid I (when) already paid the tax," says, Whoopi, "why do I have to pay it again because I died?" Er, Whoopi ... you don't. They do. Just the same way your gardener and maids have to pay taxes on the money you give them, even though you paid taxes when you earned it. (Except for the fact that they don't get the first two million tax-free.)
It would only be a "death tax" if you had to pay it again personally.
Hey, look. We like Whoopi Goldberg. She has a big heart, and she does great work. We don't want to pick a fight with her. So here's an offer to keep things friendly: Whoopi, we'll tax your kids, but we won't tax "you" twice. So if you really think you've been forced to pay a "death tax" after you die, here's our proposal:
Just come back and ask for a refund. We'll see to it that you get one.
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(1) See this tax guide for information on the Federal estate tax, which is commonly referred to as the "death tax." Here's an excerpt: "... Congress has approved a schedule that increases the amount an individual can leave to heirs tax-free to $2 million in 2006-2008 and to $3.5 million in 2009. In 2010, it will supposedly be repealed altogether."