Disclaimer: I am not a member of any political party. I am a registered Independent. I am a lifelong resident of Pennsylvania, but hopefully I will soon be calling another state home. The last list I looked at rated Pennsylvania at number 10 as one of the worst states to live in. I can affirm that it is. As a resident of Pennsylvania, I am being not only taxed to death, but taxed at death too. Let me explain.
Inheritance Tax
Upon your death, Pennsylvania imposes an inheritance tax. As of right now the rates for this tax are 4.5% if your assets are transferred to your offspring, 12% if your assets are transferred to siblings, and 15% if your assets are transferred to other heirs. This includes not just your financial assets, but real estate and automobiles, collectibles, art, in short, just about anything you possessed of value at the time of your passing. What's tragic here is most people don't even know about this tax until they find themselves in a situation where they have to deal with the death of a loved one, especially their parents. And, for good measure, the people at the inheritance tax office are pretty cold about it. There are 10 states out of 50 that charge this tax. We just happen to be living in one of the worst. It came into being in 1971 when the state came close to bankruptcy. Now the state has a healthy surplus. Do you think there is talk of doing away with the inheritance tax? Not a chance! Even the Federal Government doesn't tax your estate until it goes over 12.5 million dollars. Other states have adopted the Federal standard, others have done away with the tax completely, but not Pennsylvania.
Pennsylvania presently has a surplus in excess of $14,000,000,000.00. Why are they still imposing inheritance taxes and why is there no move at present to return some of this money to the taxpayers?
When my Dad passed in 2018, I went to the Registrar of Wills and then got directed to the PA Inheritance Tax Office, where I was greeted by a very cold-hearted gentleman who said, as I handed him some paperwork, " I love this tax! It's a cash cow for the state!"
Dad, in death, was a cash cow to Pennsylvania...pretty comforting message...
What a great sympathetic message to someone who just lost a parent. I probably could have complained about this person, but I take comfort in the fact there is a special place in hell for people who are this cold hearted.
Income Tax
Someone from the Pennsylvania government might argue that retirement income is not taxed, but they tax all of your investment income, be it interest, dividend or capital gain. Remember, they taxed your Social Security money as you paid in to the fund. They taxed your 401 K money as you paid them into your plan. As you earn your dividends, interest and capital gains, you will be making quarterly estimated income tax payments to Pennsylvania, and you better be fairly close because if you're off by a little there are penalties. Then, at your passing, your survivors get hit with the inheritance tax. I don't know about you, but I call this "double taxation".
You can have a good year with invested assets which the formula doesn't take into account, and before you know it, you're writing a check that covers your penalty for underestimating your tax liability. And, oh yeah, when you die you get banged again! Double taxation...pay tax as you accumulate and earn it, and then again when you die. See above. Pretty oppressive, huh?
More Double Taxation
Look at your internet of phone bill. If you have the misfortune of being a Pennsylvania resident, you're paying the 6% sales tax, and then you get banged again with the "PA Gross Receipts Tax Surcharge". Pretty slick, huh?
Think About It...
The next time you're driving in Pennsylvania, and you notice the many homes and property by the road, never forget the state has already penciled themselves in for a minimum of 4.5% of the estate that house is a part of when the time comes to pass it to an heir. The problem is most people do not know about the tax until they have to deal with it. I know someone where this tax actually cost them a house.
Back around 1875, some people came to the U.S. from Germany. They bought a house. They had children and raised a family. When the first generation died off, their children continued to live there. Then their children lived in the house. Fast forward to the 1990's. Someone was in line to inherit this house. however, because the title was never changed the last generation living there, taxes, interest and penalties piled up on the house. Transference of the deed became cost prohibitive. On the advice of counsel, the utilities were turned off, and the door was locked and pulled shut. The property was abandoned because of transfer taxes, and inheritance taxes. Just another example of our state government serving the people.
At the polling place where our local ballots are cast, I had an interesting encounter with a Republican committee person. I complained about the inheritance tax. His/her answer shocked me. This is a person of some means. The person asked me, "You mean there is an inheritance tax in Pennsylvania?"
Recently, while walking my dog, I ran into a local council person on our local government. I asked their opinion and got the same answer. Pretty sad. This tax is growing through all of our estates like a cancerous tumor. Pennsylvania wins the prize for the most oppressive inheritance tax in the nation hands down
The Pennsylvania Turnpike
Las year I did a little research on the PA Turnpike. At the time it was just under $12,000,000,000.00 in debt. I thought last month my EZ Pass was recharged a little too quickly, so I looked up the status of the Turnpike debt again. Now it's $13,500,000,000 in debt, the explanation given is to finance public transportation. Both of those numbers are BILLION, with a B. Any user of the Turnpike knows with the high tolls this roadway is literally a monetary printing press. So why is the Turnpike Commission borrowing against it the way they are? The tolls are already guaranteed to go up 5% per year until 2032. Public transit isn't getting any better. I recently read about SEPTA going into a death spiral.
We pay one of the highest gasoline taxes in the country (Third Highest). A lot of this money goes to public transportation which explains why the state highways are in such bad shape.
In short, we are living in one of the worst fiscally managed states in the union. I am looking to take up residence in a more southerly zip code within the next two years. It is really giving me something to look forward to.
State Stores
If you are a consumer of distilled spirits in Pennsylvania, you will have to buy them in a State operated and owned liquor store. These stores are staffed by retail clerks who are state employees. There is a retail clerks union, so I ask why do we have a system staffed by state employees, collecting generous state salaries, medical insurance and pensions benefits?
Dog Wardens
The state recently hired 60 dog wardens. Their purpose is to challenge people walking their dogs to make sure the dog is licensed. Failure to comply can result in fines up to $500. This program does nothing for dog owners and dog breeders. It is nothing more than a creative money grab. Yet the residents of PA put up with it! Read about it here:
Commonwealth of Pennsylvania, or People’s Republic of Pennsylvania?
And the beat (down) goes on...
Recent posts on the Nextdoor App:
Inheritance Tax Part I
I am in the incipient stages of planning my move out of Pennsylvania. Some may ask why. The answer is two words: Inheritance Tax.
Pennsylvania by far has the most oppressive inheritance tax in the United States. Pennsylvania's inheritance tax is confiscatory. Even New York, which according to statistics, is the most heavily taxed state in the union, exempts the first $7,600,000.00 (7.6 million) of an estate from their inheritance tax. Pennsylvania exempts NOTHING! When you're driving on a highway in Pennsylvania, and you see all of those beautiful homes by the roadside and in the distance, I can tell you with some certainty that Pennsylvania has already positioned itself for a minimum of 4.5% of their value upon the owner's passing. If you’re interested, I posted a chart on my website, mikemorrone.com, showing how other states exempt estates form their estate or inheritance tax.
If you leave your estate to a direct descendant, Pennsylvania will take 4.5% of your estate, including your home and any cars you own at the time of passing. If you leave it to a sibling, Pennsylvania will take 12% of your estate, once again including your car and your home. If you decide to leave it to a nice member of Nextdoor, Pennsylvania will take 15% of your estate, once again including your cars and your home. It’s called the "Commonwealth of Pennsylvania", but it's run like "The People's Republic of Pennsylvania". Right now, the Pennsylvania is sitting on a $14,500,000,000.00 (14.5 billion) surplus. The state's cash reserve is growing faster than an aggressive cancerous tumor. I found out about his tax the hard way.
When my Dad passed on November 1, 2018, I learned a hard lesson about the inheritance tax. Dad was a resident of Philadelphia. The guy at the Inheritance Tax Office at City Hall, was a real treat. When I handed him the REV-1500 form the tax is reported on, with the check attached, he exclaimed, "I love this tax! It is a cash cow for the state!" They sure know how to put hate in your heart. Dad's passing was nothing more than a financial windfall to this cold-hearted individual. I take special comfort in knowing there is a special place in hell for people like this.
As for me, well, I refuse to be a cash cow. The problem with the tax is most people don't know about it until they have to deal with it. It was passed in 1971. Another problem is the voters, lacking knowledge of the tax, keep sending the same indifferent politicians to Harrisburg with every statewide election. I am not a member of any political party, but I do vote. I usually vote against incumbents, because after a while, they start thinking they own those seats. A state with a $14,500,000,000.00 surplus does not need to either keep collecting this tax, or impose it without exemption. But nothing is going to change. So, in the coming year I will be voting with my feet. I wonder if they have "Nextdoor" in Florida or Georgia?
Inheritance Tax: Part II
I recently posted about the Oppressive Pennsylvania Inheritance tax. Here I will try to show how oppressive this tax can get. Back in the early 1880’s my maternal great-grandfather came to this country from Germany. He worked hard, learned the language, and upon gaining his citizenship, joined the U.S. Navy. He was a member of the USS Olympia’s crew, Admiral Dewey’s flagship, at the Battle of Manila Bay, which led to the defeat of the Spanish Navy in 1898. He served as a machinist mate.
Great-grandpa finished his tour and returned home. He bought a small row home in North Philadelphia where he had a family. Sometime between the turn of the century, and the Great Depression, he passed away.
His oldest recently married daughter would move into the house and take care of great-grand mom. Great-grandma lived to the middle 1950’s where she passed away. During this time their daughter had her own daughter and she stayed in the house to raise her. Eventually the daughter’s brother moved into with them because of the depression. Then the daughter passed away, her daughter moved away. When they all passed away, the house remained and my mother was the oldest survivor. Mom wanted to sell the house and split the proceeds with the survivors. The property taxes were up to date. This is where the trouble began.
By this time it was the late 1980s. The North Philadelphia neighborhood had deteriorated and turned into a ghetto. Mom retained the services of an attorney to investigate and change the name on the house’s title. The attorney advised Mom to call the electric company, the gas company and the water department and close all accounts tied to the house. He figured based on the low value of a home located in a poor neighborhood, transferring the title of the property would be a losing proposition. Why? Inheritance tax! Mom would have to provide the death information of Great Grand Pop, the original owner. She would also have to provide death information on her great-grandma. When the daughter moved into, the ownership of the home was never changed. The family continued to live in the house and never changed the title. Great-grand pop died intestate. The remaining family, blue-collar class people, had no knowledge of the legal ramifications of great-grand-pop’s passing. It was their home and they paid their bills and taxes. The inheritance tax would be charged at the 15% rate. The problem here is there would be 18 years of interest and penalties added to the 15% tax. When the attorney did the math, the tax, interest and penalties and transfer fees would exceed the value of the home.
The home was abandoned and taken over by the City of Philadelphia three years later for nonpayment of property tax. This is an illustration of how this tax can steal the legacy of a citizen. It is time for this tax to be repealed, but it is very unlikely to happen. Last year PA collected $38,000,000,000. The state surplus increased to $14,500,000,000. House Bill 1394 seeks to repeal the inheritance tax and it was referred to the finance committee. Apparently, it died there.
In my previous post I expressed my frustration with the inheritance tax situation. After consulting 2 attorneys and an accountant, the only way around it is to move to another state. I am in the process of downsizing. In the near future I will be traveling to 3 other states to check out real estate conditions. I do not want to put my son through the misery this tax caused my brothers and me at the passing of our father in 2018. What amazes me is how the citizens of PA keep returning the incumbents to office who caused all of this misery. What amazes me more is most people do not know about this tax…until they lose someone and have to deal with it.
The Federal government exempts $15,000,000 of a decedent’s estate from the inheritance tax. New York, the most heavily taxed state in the nation, exempts the first $7,600,000 from its state inheritance tax. The People’s Republic of Pennsylvania, er, I mean the Commonwealth of Pennsylvania exempts NOTHING! You pay inheritance tax on the first and every dollar of your estate, which includes your home and your cars and anything else you own of value. It doesn’t matter you have already paid state income tax on every dollar you earned and used to save, and buy homes and cars. Pennsylvania is the master of double taxation. Something to think about, especially when you go to vote in November. Disclaimer: I’m not a member of any political party, but I do vote and have never missed an election.
Inheritance Tax Part III (Posted to Nextdoor 2026/10/22)
Earlier this evening, while walking our dog, I encountered yet another local elected official. I asked him his opinion of PA’s inheritance tax. He knew nothing about it, and was quite surprised when I explained it to him. But his wife sure knew about it.
She was in the process of settling her parents’ estate and had to write a check in excess of $90,000.00 to pay the PA inheritance tax. They are both in the process of leaving Pennsylvania at the expiration of his term. She made a good point. When she passes and transfers her wealth and possessions to her children, the money and assets she just paid inheritance tax on will be taxed again, like a big snowball rolling down a hill and getting bigger as it goes. This is the most confiscatory tax in the United States. The only out my estate planning attorney offered was to become a resident of another state.
In Inheritance Tax Part II, I told how my mother lost my great grandfather’s house because great grandpa’s descendants never transferred the title. So many years passed by, by the time Mom tried to prepare the house for sale, the inheritance tax, interest and penalties were more than the house was worth.
What surprises me most is the people of PA know very little about this tax, and those that do seem tolerant of it. My goal is to attach a more southerly zip code to my return address and put the grave robbing state of PA in the rear view one final time.
This has to Stop!
As I pick up different news stories, I am noticing more frequently certain people are levying criticism of others by calling them Nazis. This really needs to stop! The most recent one I saw which I find particularly offensive, is former Congressman Jamaal Bowman calling Elon Musk a Nazi and a thief. Calling one a Nazi is probably one of the worst things you can say about another person. There is a forgotten incident from World War II that is coming to light, and I wonder if Mr. Bowman would heave this insult if he were aware of it.
Somewhere around the time of the Battle of the Bulge (I lost an uncle during that battle), an atrocity was committed against 11 black American soldiers. They faced overwhelming force and decided to take their chances as POW's. They were marched out of the town by SS soldiers. A short time into the future it was discovered these 11 black soldiers, wearing the U.S. soldiers uniform were slaughtered. And why were they slaughtered? BECAUSE THEY WERE BLACK! What is particularly galling about this was no one was prosecuted for this heinous war crime. The investigation was closed and marked secret. So 11 black American soldiers were tortured and slaughtered and OUR GOVERNMENT DID NOTHING!
I wonder if Mr. Bowman, a man of color, would have hurled this insult if he knew of this event and the lack of follow-up by the U.S. Government, the allies or any legal body in authority?
In my opinion, no loyal American citizen, Elon Musk included, would be capable of such an act.
This Nazi insult craze has to stop!
Read the story yourself. Here is a link:
Emerging from history: Massacre of 11 black soldiers
Pennsylvania: A State Run By Idiots!
Look at the picture of the newly issued PA license plates. Is it me, or do the numbers 0 and 8 look alike? It speaks volumes about the person who authorized this design. What do you think?
