It’s a hot button issue, the Estate Tax, also known as the “Death Tax.” The political sides are fairly well defined — republicans want the Estate Tax abolished and are pressuring democrats to make this happen. Should this happen, the New York Times projects that it may cost the government a trillion dollars by 2011.
But what would this mean for business? Most support dissolving the tax, since that would let more money remain in their pockets. But such support may be short-sighted. Even if the hit is a quarter of the Times’ estimate — say, $250 Billion — it would have an impactt on our economy. The government may have to raise sales tax to make up the difference, a measure that may hurt business if product sales decrease. And if the income tax increases? Employees will desire raises to maintain their financial status.
Of course, maybe the government won’t raise taxes to make up for the loss. They might just cut certain services. While that may not affect business directly, it could hurt employees, shareholders, and customers. Then again, maybe the repeal of the tax won’t hit the Government that much. Do you think the Estate Tax should be abolished? Why?