CNBC Should Know: The U.S. Doesn't Tax Death
I'm going to play Dean Baker for a moment and criticize the media on an economic issue.
CNBC ran the report below yesterday about the estate tax. The only problem was that the network decided to label the tax it was discussing as the "death tax" and in doing so immediately became a participant in one of the great public relations hoaxes of all time.
As I've said before, the phrase "death tax" was invented to increase support for cutting or eliminating the federal tax on the estates of the extremely wealthy. This is a tax that very, very few pay and getting support for legislative changes has always been hard. So proponents came up with a truly brilliant public relations ploy: instead of talking about taxing "estates," they talked about a tax that would be applied by Washington after someone passed on.
The thinking was that, while few have an estate, everyone dies. Hence the tax that only a relative handful will ever pay and few cared about became a tax about which everyone should be concerned. Cutting the "death tax" had far more popular support. It was brilliant.
The only problem is that it was also not true. The estate tax isn't on death any more than the income tax is on life.
Given it's primary audience, it's not hard to understand why CNBC used this phrase as the title of its report. It's just sad.