They say only two things in life are guaranteed: death and taxes. Today I’m going to talk about the moment those two words combine and form the dreaded phrase “death tax.”
The estate tax, with its macabre “death tax” nickname, is a tax the federal government levies on the total taxable value of the estate of a deceased person. Let me be clear: each state has its own policies regarding inheritance taxes. I’m discussing the federal estate tax.
Under current law, individuals and couples with $5.43 million and $10.86 million, respectively, are exempt from paying the tax. Estates pay a maximum rate of 40 percent on the amount of assets above those levels.
Those are large numbers, so most Americans won’t be impacted by the estate tax. But many in the horticulture industry will be. There are some very successful companies in our industry that are valued at levels well above the minimum threshold. Gosh, think of the value of the just the land that many of our members’ businesses sit on. It doesn’t take long to be at the level that makes you liable for the estate tax. Stories have been written about businesses having to be sold just to pay the tax.
As expected, this issue divides people. Some think the tax should be repealed, while others think it serves an important purpose. Did you know the tax was actually repealed in 2010? But then it was reinstated for individuals dying in 2011 or later years.
Some experts have indicated that killing off the estate tax would increase the deficit by $269 billion (with a B) over a decade. Other studies suggest that the expense of collecting the estate tax is almost as high as the funds received. Ahhh, there are always two sides to every story…
The tax section on Forbes.com had a post about 18 months ago that outlines in easy-to-understand terms the pros and cons of the estate tax.
AmericanHort’s position is that the estate should be repealed. In March, AmericanHort joined 100 like-minded organizations representing business interests urging the Senate to take the next step in the legislative process by bringing the House-based legislation (April 2015) to the Senate floor for a vote.
AmericanHort and these other organizations support full and permanent repeal because they believe repealing the death tax would spur job creation and grow the economy; the death tax contributes a very small portion of federal revenues; the tax falls particularly hard on minorities; a super-majority of likely voters support eliminating the tax; and the tax is simply unfair. Proponents say repealing the estate tax will help family businesses create jobs, expand operations, and grow the economy.
What do you think? Should the estate tax be repealed?
Author: Laura Kunkle
Communications & Media Relations Specialist
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