The U.S. Senate and the House voted to repeal the estate tax. It has now become law. However, those supporting the estate tax have claimed that, from the very the beginning, the intent of the estate tax was for the redistribution of wealth. Nothing could be further from the trust because, historically, the estate tax existed solely for revenue purposes until the 1930s.

Here is some historical background:

The first estate tax was enacted July 6, 1797 to help pay for rearming the U.S. Navy. The tax required only federal stamps be purchased for wills and estates. This tax was repealed four years later because the need for the revenue passed.

During the Civil War, in 1862 a direct tax on inheritances was imposed which ranged from 0.75 percent to 5 percent.

In 1864, the top rate was raised to 6 percent; but the tax was then abolished July 14, 1870.

In 1898, an estate tax having a top rate of 15 percent on estates valued at over $1 million was imposed to defray the costs for the Spanish-American War. It was repealed on April 12, 1902.

In 1916, America had its fourth estate tax enacted. This tax set a top rate of 10 percent on estates valued over $5 million. In 1917, it was raised to 25 percent, but this rate applied only to estates valued over $10 million. Unlike its predecessors, this tax was not repealed after WWI, although the top rate dropped to 20 percent in 1926.

President Franklin Roosevelt raised the top rate to 60 percent in 1934, and to 70 percent in 1935. The same bill increased the top income tax rate to 75 percent and increased corporate taxes. Altogether the law raised only $250 million annually.

Today the estate tax exists only to redistribute income, since its revenue yield is negligible. However, according to the nation's top estate tax experts, proper estate planning makes the tax virtually voluntary.

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