Chapter 4 Blog

http://online.wsj.com/article/SB123180759988175649.html

Summary:

In this article, it talks about the “death tax” which is a tax that family members have to pay due to the death of an owner. Mr. Obama wants to bring this estate tax back which was supposed to expire in the year 2010. He states that this “death tax” will create new jobs, but the author thinks otherwise. Although this tax is targeted towards the wealthy people such as Bill Gates, these rich people have ways to avoid the taxes which ultimately means that the lower and middle income people pay it. This is a problem because those two groups of people (lower and middle class) are responsible for creating new jobs, but if those people can’t pay the taxes, then there will be no new jobs created. Also, studies have shown that countries are better off without a “death tax” because many countries remove this tax so there would be more jobs. Although the government thinks that they are creating more jobs for the people in the United States, the results show otherwise.

Connections:

Since chapter four talks all about taxes created by the government, this article is related to this chapter. Since revenue is made as a result of taxes, the estate tax also creates revenue. Also, there the ability to pay concept can be applied to this article. Since the wealthy have the ability to avoid much of the estate tax, some argue that taxes should be paid according to their incomes and all their personal wealth (e.g. real estate, stocks, bank accounts, etc.) This is also somewhat related to a regressive tax because the poorer people end up carrying the burden of this “death tax” while the wealthy people find ways to evade it which makes the poor people pay a higher percentage of it.

Reflection

After reading this article, I have to agree with what the author says. If studies shown that eliminating this “death tax” do indeed help create new jobs, I think Mr. Obama should consider getting rid of this estate tax. Also, Countries such as China and other poor countries eliminated the “death tax” and as a result, new jobs were created. The only countries to pay the “death tax” are the United States, New Zealand and the United Kingdom. In my opinion, there is no point continuing this tax because most of the people the country is taxing are the poor people. If the lower and middle class people are the ones that are looking for the jobs, giving them more taxes to pay isn’t going to help them one bit. Overall, studies as well as results are displayed that the “death tax” is better off excluded.