Starting the Conversation Should We Bury the PA Death Tax?

pennsylvania_eliminates_farm_inheritance_tax_1_634770794488947785By Marianne Reid Anderson

A reader from McKeesport wrote to me to awaken me to the injustice of the Pennsylvania Inheritance Tax also known as the “Death Tax.” As it turns out, Pennsylvania is one of only a handful of states that taxes certain beneficiaries of someone’s will even though the deceased has already paid their taxes on these assets. Depending on the relationship to the deceased, the beneficiary may be exempt, as in the case of a spouse, or hit with a whopping 12-15% in the case of a sibling or third party.

What is typically occurring, is that the estate isn’t in cash or any other liquid asset but is actually a home and in order to raise the money for the tax, the home must be sold and when it is, not only is the death tax owed but then any money received from the sale is then taxable as income and taxed again on top of the death tax. The result is that the beneficiary ends-up receiving only a fraction of what was left to him or her with the state taking the lion’s share.

Only a few states ever adopted the death tax and several have already repealed it with Ohio being the most recent. Shouldn’t Pennsylvania do the same and repeal this tax that takes advantage of the bereaved?

But what do you think? As always, I am interested in your thoughts, comments and feedback so let’s “Continue the Conversation” on my blog at http://northernconnectionmagazine.blogspot.com where I have posted additional information, startling facts, links to supportive material and, most importantly, contact information to government officials. Looking forward to hearing from you.