Taxes as a Tool of Social Equality
Karl Marx believed that inheritance taxes were the more legitimate tool for social equality. This view gradually changed with the industrialization and globalization process, and in the current environment, effective steps can be taken to avoid the tax altogether. Different countries follow different tax systems to suit their socio economic strata.
Tax System in the USA
The USA has the second-lowest inheritance tax in the world, wherein the surviving spouse remits nothing whatsoever. The beneficiaries inheriting the amount exceeding $1.5 have to pay federal taxation and other subsidiary taxes making it a total tax of 50%. In January 2001, the lower threshold was only $675,000, but the figure has more than doubled in just 5 years time.
Tax System in the U.K.
Just as in the United States, in the United Kingdom too, the surviving spouse pays nothing. Whereas all the other beneficiaries inheriting above £275,000 (€396,000 or $483,000) will be taxed at 40%.
Tax System in Germany
In Germany, inheritance tax is paid by the beneficiary. The spouses pay 7% on inheriting a sum above €307,000 ($374,000). However, the tax is 30% on inherited property of above €25.9 Million ($31.5 Million). Other relatives pay 12% to 40%, and non-relatives pay 17% to 50% on legacies above €307,000 ($374,000), both rising on a similar sliding scale.
Tax System in France
France follows similar taxing system as Germany. The inheritance tax is paid by the beneficiary. A surviving spouse pays 5% on property inherited above €76,000 ($92,000), surging to 40% on inheritance above €1.776 Million ($2.162 Million). Relatives pay at similar rates but with a lower tax-free allowance, whereas the non-relatives pay up to 60% with an almost zero tax-free allowance.