Death tax. Estate tax. Inheritance tax. People refer to it by many names, and opinions on its morality and constitutionality abound.

Opponents of inheritance tax -- who sometimes call it “death tax” -- say it’s immoral to place a financial burden on a family that has just suffered the loss of a loved one.

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Death Tax
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The College Republicans National Committee protests the federal estate tax in Washington, D.C., on June 8, 2006.
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Proponents say that death taxes are good sources of revenue for governments because the taxes apply only to the wealthy. In an inheritance, money passes from one party to another, and supporters say this money should be taxed, just like income or taxable gifts.

But what is inheritance tax? Is it different from estate tax? Why is there a tax on death? And how does this "death tax" work?

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Indeed, as you will find out on the following pages, inheritance tax is not the same as estate tax, though they do share some similarities and follow some comparable procedures. Inheritances are subject to some tax exemptions. And though inheritance tax rates can be high, they work in different ways depending on the inheritance and the state you live in.

First, take a look at the differences between inheritance tax and estate tax.