The added complexity and compliance costs make this one of the least efficient federal taxes. President Bush believes that the bias of the death tax against the family farm and family business is the antithesis of the American Dream. Accordingly, his tax relief plan will eliminate the death tax. Eliminating the death tax will allow family farms and businesses to be passed from one generation to the next without having to break up or sell the assets to pay a punitive tax to the federal government. As a result, wealth would be taxed only when it is earned, not again when entrepreneurs and senior citizens pass the fruits of their labors to the next generation.
Taxable income is income less deductions and personal exemptions.
Rate schedule assumes tax plan is fully phased in.