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Estate Tax History

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History of the Estate Tax

Estate tax was imposed way back in ancient times about 3000 years ago. In Egypt in the early era, it had been required to have a 10 percent tax on the transfer of assets at the time of death. Even in the first century AD, Augustus Caesar imposed taxes on inheritance and transfer of properties to all but close kin.

In medieval period, since all estates and properties are owned by the king, an heir who wished to transfer properties must pay transfer taxes in order to grant him the right of use of the property.

History of the US Federal Estate Tax

The Stamp Tax of 1797 was formed by the government to help fund the national defense in the war against France that had been started before the act was created. Stamp …show more content…

Nevertheless, estate tax was not repealed after the war. This Act established the modern day income tax which it also had the estate tax with many facets of the current tax system.

The evolution of modern estate tax had two major time frames which the first one was from 1916 – 1975 and 1976 – present. The Congress introduced the gift tax in 1924. This was a levy on asset transferred from one person to another person who was alive on the day of transfer.

Gift tax apparently was created because transfer of property while alive has no tax at all in that time. To avoid tax, wealthy individual would likely transfer their properties while still living. In 1932, the government made a decision to put gift tax as part of their tax …show more content…

"A History of Federal Estate, Gift, and Generation-Skipping Taxes." Digital.library.unt.edu. April 9, 2003. http://digital.library.unt.edu/ark:/67531/metacrs5392/m1/1/high_res_d/95-444_2003Apr09.pdf Robbins, Garry. “The Heritage Foundation.” Heritage.org. January 16, 2004

Fleenor, Patrick. "A History and Overview of Estate Taxes in the United States." Taxfoundation.org. January 1, 1994.

Conclusion

Estate tax had been the major revenue generating for the US government in the history of the country. Significantly, used as funding for wars. In current period, though income taxes produce more revenue for the federal government, estate tax still has the big part among researchers, policy makers and the general public.

The transfer tax system has its large effect on the economy. Large estates pay the highest tax rates and most tax per estate.

Sources:

Jacobson, Darien B., Brian G. Raub, and Barry W. Johnson. “The Estate Tax: Ninety Years and Counting. http://www.irs.gov/pub/irs-soi/ninetyestate.pdf Fleenor, Patrick. "A History and Overview of Estate Taxes in the United States." Taxfoundation.org. January 1,

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