Estate tax calculation is at issue

A reader makes an incorrect analogy, comparing the argument that paying estate taxes is not taxing income twice just like a business owner is not causing income to be taxed twice when he pays salaries to workers ["Justifying estate taxes," Letters, Dec. 17].

He incorrectly contends that the estate recipient is a separate entity, just like an employee, and that income a business owner earns is taxed, as is the salary he pays to his worker.

He fails to recognize two points: First, the estate recipient is not the taxpaying entity, the estate is. Second, and even more important, the business owner gets a deduction for the salary he pays a worker, and thus the salary paid to the worker is only taxed once to the worker.

The estate tax taxes the same funds that were taxed earlier when earned or inherited and continues to tax it each time it passes to the next generation. This has the obvious effect of taxing inheritances numerous times.

Fred Mandato

Huntington

Employee pay doesn't come out of a business's profit. It's a pre-profit expense on which the business is not taxed; therefore, it is proper for the employee to be taxed on it.

In the case of the estate tax, that is being taxed twice on the same funds. Once, when earned and then again when passing it on.

Now, if your letter-writer wants to reclassify the assets from belonging to the estate (which is currently taxed) to being income to the recipient (who may have to pay taxes on it), that would be a different situation.

It would then be like you paying sales tax when you purchase a car, and then later when you sell it, the new owner has to pay sales tax again.

W.J. Van Sickle

Brentwood