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Serious Consideration by Congress: the ‘Death Tax’ – Really?

Death and taxesThe 240-179 vote on whether or not to completely repeal the so-called Death Tax broke down largely on partisan lines, with seven Democrats voting to repeal the estate tax and three Republicans voting against it.  With the Joint Committee on Taxation projecting that the death tax will impact less than 10,000 estates in 2015, just why Congress has chosen to debate this issue over all of the important issues we are facing, may have citizens scratching their heads.

The House last voted to end the estate tax 10 years ago, which means that the vast majority of Republicans never had the opportunity to stand up for small businesses who are threatened by the death tax every day, said a Republican quoted in The Hill’s article titled“House votes to repeal estate tax.

Senator John Thune (R-SD) introduced legislation to repeal the estate tax, but it’s uncertain when or if that proposal might get a vote. There were 54 senators who supported the estate tax repeal last month in a non-binding budget resolution vote. Nonetheless, this is six votes short of the 60 needed.

The article notes that a repeal of the estate tax would increase the deficit by $269 billion over the next 10 years, and the Joint Committee on Taxation projects that the estate tax will impact 5,400 estates in 2015. This is approximately 0.2% of the 2.6 million deaths expected in the U.S. this year.

Under current law, individuals with estates of under $5.43 million in the year 2015 (and couples with $10.86 million estates) are exempt from paying the estate tax of 40% on the amount of assets above that threshold.

The article says that Republicans think they have a strong argument for repealing what they believe is “an immoral tax that resonates with voters across the economic spectrum.” The GOP claims that people are taxed every step along the way as they accumulate assets—as a result, their heirs shouldn’t have to worry about the estate tax when they die. In addition, the estate tax is more likely to hit family farms and small businesses than the ultra-wealthy who can afford complex estate planning. But, as one might guess, the Democrats see this differently and see the vote as another way to portray the Republicans as the party of tax cuts for the rich.

You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.  Why not call us for a complimentary consultation at 757-259-0707.

Reference: The Hill (April 16, 2015) “House votes to repeal estate tax”

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The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.