In the United States, the tradition of taxing assets at death began with the Stamp Act of 1797.
Congress repealed the Stamp Act in 1802. However, a pattern was set, and for the next hundred years or so, estate taxes were used as a way to finance wars.
The Revenue Act of 1916 introduced the modern-day income tax and also contained an estate tax. Estate taxes were increased in 1917 as the U.S. entered World War I.
However, this time, the estate tax did not go away after the war ended. During the 1920s through the 1940s, estate taxes were used as another attempt to facilitate the “redistribution of wealth.”
Estate taxes are the most aggressive of the four wealth predators.
Here’s a sad story about Kristi Noem (R-SD).
Her father died unexpectedly when she was only 22 years old. The family had land, machinery, and cattle, but they didn’t have any money in the bank.
Shortly after her father died, they got a bill in the mail from the IRS. They either had to sell their family farm or get a loan. They chose a loan, and it took them years to pay it off!
Her family’s story represents the struggle many are faced with when attempting to pass their hard work down to the next generation.
Many believe that estate taxes are eliminated. Actually, no.
There is a death tax on your IRA and 401(k). It’s the “Hidden Estate Tax.”
Want to learn if you can eliminate that tax? We’re here to show you how, starting with our free financial report!