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The Federal Estate Tax on the Transfer of Inheritance from a Deceased person has long been a contentious issue in America.

Currently, the top estate tax rate is 46% with a $2 million exemption. As Congress considers permanently repealing

the federal estate tax, Director of Tax Policy Studies, Chris Edwards, offers some good reasons

for doing so.

Chris, I thought that President Bush already repealed this tax.

Well, in 2001, the big Bush tax cut law repealed the Federal Estate Tax

but only for a single year. In 2010, in 2011 the state tax or

death tax comes back in full force at a rate of 55%.

So what Congress is doing this year is trying to permanently repeal the estate tax

effective immediately in 2006.

What exactly is wrong with the estate tax? immediately in 2006.

What exactly is wrong with the estate tax?

Well, there's a lot of things wrong with the estate tax.

A lot of economists think that the estate tax is the most inefficient tax in America

for two reasons.

Firstly, the government spends an enormous amount of time and effort to administer and

try to enforce this tax because of its extremely high rate, wealthy Americans and small businesses put it a huge amount of effort into avoiding the tax.

The estate planning and estate tax avoidance industry is gigantic with high-priced lawyers and

accountants doing all kinds of paperwork and litigation.

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