The work of the Tennessee State Legislators has never been more important to the lives of those of us in the rural part of the state than this last session.
One of the changes most important to many farming families and small business owners was the elimination of the state of Tennessee’s Inheritance and Gift taxes. Although this has been written of as a give – away to the wealthy, let’s take a look at what actually happened.
Before the actions of the legislature, Tennessee was one of only two states still taxing inheritances and its companion the gift tax. The only reason for the gift tax was to prevent citizens from giving away their assets before their death to avoid taxation. The gift tax started at the low threshold of only $13,000, the cost of a car for a senior in high school. In many cases over the years, farmers had given their child three acres or so to build their house on the farm, only to discover at their death when the deeds were written, the children now owed a considerable “gift tax”. With a threshold of $13,000, three acres of land could easily cross the line into a taxable gift. A couple that wanted to deed the family farm of say -100 acres to the children – would have owed $30,000 in Tennessee gift tax. On the inheritance side, the legislature increased the threshold to one million in 2012, but does not completely phase the death tax out until 2016.
But the more basic question on which the inheritance tax was decided was fairness. When we abolished the inheritance tax, we left behind only the state of Connecticut still taxing citizens and here’s why.
You spent your whole life accumulating assets that you could enjoy and pass on to your children and grandchildren. You paid your taxes every year in the process of living your life and saving your money to get ahead. How is it right that the government decides to attend your funeral and give a bill to your family for any inheritance over a million dollars? Or any other amount? It’s already been taxed once!
And here, you see, is the logic of the Democrat thought process that gave us this unfair tax. The government of Tennessee decided that if you died with more than 1 million dollars, they had a “right” to take some of it. The state of Tennessee, in its arrogance, decided they could accurately calculate how much of an estate you could pass on to your children before they got a piece. Not because it was ill-gotten, not because it was against the law, but because they are the government and they can make those kinds of decisions! (And besides, don’t we all hate rich people?)
You may think eliminating the death tax is a give-away to the rich. (We all hate’em, don’t we?) I am thrilled that in a state where only 845 Tennessee families hosted a funeral with a state tax collection agency last year, our legislature abolished a very unfair tax.
And let me tell you a little tax secret. Because wealthy people who through their own hard work and initiative have more income, they will always get a bigger piece of a tax break. Their $50,000 tax break probably won’t change their life. But money like that could save a working man’s inheritance! It’s time in the land of the free and the home of the brave, we stopped punishing hard work and success, and try instead to use it ourselves to improve our lot in life.
And when we die, we will know our family can enjoy the fruits of our labor!