According to the Committee to Protect the Family (P.O. Box 15886, Sacramento, CA 95852), our benevolent government is preparing to hit your family where they live - literally.
They report that according to the Wall Street Journal, a Survivors' Homestead Tax is proposed. This would provide that the difference between what was paid for a home and what the value is at the time of death be taxed at 28 percent. So, if your home cost $10,000 when you bought it years ago, but is now valued at $150,000 (not at all an unlikely price increase during the years of inflation), the heirs would have to pay 28 percent of the $140,000 difference, or $39,200.But that is not all. Another proposal is that the exemption in the inheritance tax be reduced from $600,000 to $200,000, with a 37 percent tax on the balance. A similar bill was introduced last year.
So suppose the total assets to be passed to the heirs includes the $150,000 value of the house plus an insurance policy valued at another $100,000 and there were some other assets valued at $50,000; there would be an inheritance tax of 37 percent on the $300,000 less the $200,000 exemption, or $37,000.
The total tax now becomes $39,200 plus $37,000, or $76,200. Would the widow have to sell her home to raise the money to pay the tax? And then, where would she live? Or if she were able to keep the house, what income would she have to live on?
The politicians are too smart to put this tax increase in a regular tax bill. No. The proposal, according to the Wall Street Journal, is to hide it in the health care bill.
The solution to the huge deficit and debt is not to tax the widows and orphans on their home and food, but to cut the cost of government. For instance, why does the federal government borrow money to give to foreign governments? Or to build swimming pools?
Robert W. English
Salt Lake City