Senator Flake Busts Estate Tax Myths
Republican Senator
(1) Policymakers have weakened the tax so much that very few estates face it at all.
Legislation enacted in 2001 gradually phased out the tax by raising the exemption level and reducing the rate, leading to the tax's temporary repeal in 2010. The tax returned in 2011 but in much weaker form. Today, the first
As a result, the number of estates that face any estate tax has fallen by more than 90 percent, from over 50,000 in 2001 to fewer than 5,000 in 2015 (the latest year for which we have comparable data). Put another way, the wealthiest 2 out of every 100 estates faced any estate tax in 2001, but only the wealthiest 2 out of every 1,000 do today. (See chart.)
Number of Estates Facing Estate Tax Has Plummeted
Moreover, the top statutory rate has fallen from 55 percent to 40 percent. And, primarily because of the high exemption level, the few estates that actually face the tax pay only 19 percent of the estate in tax, on average.
Because the estate tax affects only the wealthiest 0.2 percent of estates, it's the most progressive part of the tax code. It's also the nation's most effective tax policy tool to mitigate the impact of large inheritances on inequality.
(2) Repeal would expand deficits. Eliminating the estate tax would cost
(3) Claims that estate tax repeal would be an economic boon merit skepticism. Repeal proponents claim that the tax hurts the economy and that repeal would stimulate it. Yet,
See figure here (https://www.cbpp.org/blog/senator-flake-busts-estate-tax-myths).
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