by Jerry Agar

You may have heard that this is the best year to die if you want to leave your money to your children.  Perhaps not.  Illinois - as well as Washington - seems unwilling to give up on the death tax.

The estate tax - most people call it the death tax - ended in Illinois in 2010, but according to a report in the Illinois State House News, "'Because of the lag time in collections, the state’s revenue is safe — for now,' said Jim Muschinske, revenue manager for the Commission on Government Forecasting and Accountability, the state’s economic forecasting arm.  'There is a nine-month lag, meaning the state will continue to collect taxes until September and the lack of a set law will not affect state collections during this fiscal year,' Muschinske said. The state is expected to collect approximately $265 million this year from the estate tax."

Okay, so we have to wait until October to die, is that it?  Apparently that is not it.  House Majority Leader Barbara Flynn Currie, D-Chicago, says that a new law could retroactively collect taxes for any amount of time the law was not in effect.

Daniel J. Mitchell of the Cato Institute writes that "the 'death tax' wins the prize for being the most self-destructive part of the internal revenue code."

Mitchell argues that the keys to long-run growth are savings and investment, both of which are destroyed by a huge tax at the time of death.

Farmers are especially hard hit by this tax, as they tend to have little cash, but are "land-rich."  When the owner dies, a tax of as much as 45 percent is imposed on an estate that has little cash with which to pay it.  Rather than continue a family farm, families may be forced to sell some or all of the land in order to pay the tax.

The American Family Business Institute has determined that the death tax costs Illinois over 65,000 jobs.  The AFBI takes on the myths of the issue in a report you can read here.

Austria, Sweden and Russia are among the nations that have realized that the death tax is a bad idea, yet Rep. Mike Boland, D-Moline, believes we need it because "we’re in a financial crisis right now."  Is losing 65,000 jobs the way to get out of a financial crisis?

President Obama recently criticized the idea of blowing money in Las Vegas, but Arthur Laffer points out that if you don't blow your family's inheritance in Vegas, the government will take it anyway.

Jeff Jacoby reported in the Boston Globe that while many people believe that the estate tax only targets super-rich people who stand to gain an un-earned windfall when a parent dies, it actually hits thousands of family businesses.

Isn't that great?  Former communists are willing to let their people die free of double taxation, while Springfield considers re-enacting the law and back-taxing the estates of those who died in the meantime.