On behalf of Chandler and Brown, Ltd. posted in estate tax on Thursday, November 23, 2017.
The issue of the estate tax has come to the forefront of American politics lately, as the government looks to revamp U.S. tax laws. Therefore, it is important for people in Saint Paul and across the nation to have a basic understanding of what the estate tax does and who it affects.
Currently, if an individual’s wealth amounts to $5.49 million or more, their estate will be taxed by the federal government when they pass away. Since it is set at such a high level, in actuality, few people are subjected to the estate tax. The Tax Policy Center reports that in 2013, while 2.6 million individuals passed away in the United States, merely 11,300 of their estates were subjected to the estate tax. To put it another way, the estate tax affected under 0.2 percent of all those who died in the United States that year.
The Republicans of the U.S. House of Representatives have proposed doing away with the estate tax in six years, and, until then, raising the threshold of who it will affect to those who have $10 million in wealth or more. That being said, according to the Joint Committee on Taxation, this proposal, if passed, would cost the U.S. government approximately $150 billion over the following decade. The Republicans of the U.S. Senate have also addressed the issue of the estate tax. Under their proposal, while there would not be a repeal of the estate tax, the threshold of who it will affect would be raised to those who have $10 million in wealth or more. While some claim that repealing the estate tax will help the economy, according to some research, doing away with the estate tax would not really have a substantial impact on the nation’s economic status.
No matter where a person in Minnesota falls on the issue of the federal estate tax, it is important to note how any changes to current law will affect them. Those who have questions about the estate tax are encouraged to discuss the matter with their estate planning attorney, who can provide more information.