It was in 1916 — 100 years ago this year — that America made a big, big mistake, one that has done significant damage to our economy and the fairness of our tax system for an entire century. We are talking about the estate tax, more popularly known as the death tax.

The tax is in the news again because Hillary Clinton wants to raise the tax at death from 40 percent to 45 percent and impose it on far more small family-owned businesses, farms and ranches. Donald Trump wants to eliminate this unfair tax, because a lifetime of paying income taxes, sales taxes, property taxes, dividend taxes, capital gains taxes, payroll taxes and employee taxes should be enough. Almost every small-business association in America agrees and has endorsed the Trump plan.

Why is this tax so un-American? Because many small-business owners who want to pass their family legacy on to their kids and grandkids tend to be asset rich but cash poor, meaning their businesses may appear quite valuable on paper but in many cases they lack the cash to shell out 40 percent of the business’s value to the IRS when the parent owner dies.

When the kids don’t have the cash on hand to pay a sizable tax bill on their parents’ life savings, they must sell off equipment or land, lay off workers and, in the worst cases, dissolve the family business to pay Uncle Sam’s ransom. What a travesty. Sell the farm to pay the taxes!

So why does the left insist on raising this tax, rather than killing it? The only answer we can think of is greed. Amazingly, this tax raises almost no revenue. In 2014 the estate tax collected — hold on to your hats — 0.43 percent of all federal revenues. It raises less than the government spends every 48 hours.

But to get that tiny morsel of revenue, the tax does substantial damage. When the death tax is high, two things happen. First, really rich people like Warren Buffett and Bill Gates engage in complicated and costly estate tax planning with the best lawyers money can buy to avoid paying the tax. Both Gates and Buffett put billions into a massive charitable foundation, run by family members, in part to avoid death taxes. So the super-rich almost always find ways around this sinister tax. It’s the smaller businesses without clever tax accountants that get clobbered.

A 2009 report found that the life insurance industry collects almost as much as the government does per year from the perpetuation of the death tax. No wonder Warren Buffett, who owns seven life insurance companies through his behemoth Berkshire Hathaway, is seen cheering on Clinton’s calls for taxing even more businesses at an even higher rate. According to the same report, the Buffett life insurance cabal funded a perky public relations campaign to retain the death tax. He lobbies for a tax he finds every loophole to avoid.

But Hillary Clinton may be the biggest hypocrite of all. She says the Trump plan is a tax break for millionaires and billionaires like him. Yet Hillary and Bill Clinton have gone to great lengths to shelter their own fortune from the death tax, by using sophisticated trusts and moving their New York home into residence trusts to shield it from taxation, according to a Bloomberg analysis, all while pushing for higher death taxes on small businesses.

The Clintons want one set of tax laws for the rest of the country while they and their friends skate free under a separate set of rules. Family-business owners who are too busy sweeping up the shop floor or herding cattle to mount a coordinated national public relations response are collateral damage.

The unhindered transfer of wealth is one of the most vital characteristics of a prosperous economy. Growth is enhanced in America when each generation hands down an endowment of assets and knowledge to the next. We don’t build great empires so that the government can take half of them or more when we die. One reason so many people keep working hard even late into their lives is to leave a family legacy to their children, and then to allow them to pass on that business or farm to their children. We’ve learned through history that if the kids and grandkids live their lives like drunken playboys, the wealth will quickly disappear. If they expand the business, it means more jobs, more wealth, and more tax revenues — and a better life for their children.

This is the process we call the American dream.

Clinton wants to tax that dream away.

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