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The federal estate tax provides billions a year for essential priorities like education, the environment and national security. It’s also the most progressive of federal taxes, applying to only the wealthiest two of every 1,000 estates.
But misconceptions surround the tax. And efforts are afoot in Congress that would weaken it.
The tax has already been steadily weakened since the Bush tax cuts in 2000, as rising exemptions have meant that less of an estate’s value is subject to the tax. In 2000, the exemption was $675,000. Only two of every 100 estates nationally were subject to the tax. The exemption is now $3.5 million for an individual, and only one in every 500 estates across the country owes any tax.
While, the rhetoric is that the estate tax hits the little guy, the reality, according to an analysis by the Tax Policy Center (TPC), is this: only about 110 small farms and busi¬nesses across the country would owe any estate tax in 2011, if the 2009 parameters were made permanent. In Washington State, only two small family farms or businesses would owe any estate tax in 2011, under those parameters.
Now some proposals in Congress would weaken the tax even more. According to an analysis by the Washington State Budget & Policy Center, only the wealthiest estate owners would stand to benefit from a proposal by Senators Blanche Lincoln and John Kyl (along with a similar proposal from Representative Shelley Berkley in the House).
For estates valued at $20 million, it would mean an average tax cut of $3.5 mil¬lion. This would cost the nation $153 billion more in lost revenue and increased interest on the higher national debt than a more fiscally responsible proposal by President Obama.
Read the entire report here:
But misconceptions surround the tax. And efforts are afoot in Congress that would weaken it.
The tax has already been steadily weakened since the Bush tax cuts in 2000, as rising exemptions have meant that less of an estate’s value is subject to the tax. In 2000, the exemption was $675,000. Only two of every 100 estates nationally were subject to the tax. The exemption is now $3.5 million for an individual, and only one in every 500 estates across the country owes any tax.
While, the rhetoric is that the estate tax hits the little guy, the reality, according to an analysis by the Tax Policy Center (TPC), is this: only about 110 small farms and busi¬nesses across the country would owe any estate tax in 2011, if the 2009 parameters were made permanent. In Washington State, only two small family farms or businesses would owe any estate tax in 2011, under those parameters.
Now some proposals in Congress would weaken the tax even more. According to an analysis by the Washington State Budget & Policy Center, only the wealthiest estate owners would stand to benefit from a proposal by Senators Blanche Lincoln and John Kyl (along with a similar proposal from Representative Shelley Berkley in the House).
For estates valued at $20 million, it would mean an average tax cut of $3.5 mil¬lion. This would cost the nation $153 billion more in lost revenue and increased interest on the higher national debt than a more fiscally responsible proposal by President Obama.
Read the entire report here:
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