Lawmakers Seek Repeal Of Federal Estate Tax

On behalf of Louis Pacella, Attorney at Law posted in Estate Tax on Thursday, June 20, 2013

Readers of this Los Angeles estate tax blog may recall our discussion of the new federal estate tax law in our Jan. 14 and March 11 posts. The tax was set to expand significantly at the end of the year, with everything above $1 million in the decedant’s estate subject to the tax. Just before that happened, Congress reached a compromise and passed a deal to exempt up to $5.25 million per individual or $10.5 million per couple, adjusted for inflation, and set the tax rate at 40 percent.

While that bill passed, some lawmakers opposed the compromise and believe that there should not be a federal estate tax at all. To that end, a pair of House members have introduced a bill to repeal the tax.

Though the estate tax will affect a fairly narrow segment of the U.S. population, some politicians in the House and Senate oppose the tax on principle. They say that the idea of a tax upon death should not be the business of government and unfairly takes away a portion of a successful person’s estate.

Supporters of repealing the estate tax also believe that doing so would create 1.5 million new jobs. The Tax Policy Center, a think tank, estimated that around 8,700 tax returns would be affected by the current tax, though the amount of expected revenue is not given in an article about the bill.

Estate taxes will continue to be controversial. At least for now, people with a sizeable estate should prepare their estate plan with the tax in mind.

Source: The Hill, “GOP tax-writers roll out estate tax repeal bill,” Bernie Becker, June 19, 2013