It’s graduation time of year, so I decided to dig out one of my law school graduation presents—my Black’s Law Dictionary for a couple of fancy definitions:
Estate: The amount, degree, nature, and quality of a person’s interest in land or other property (your “stuff”).
Tax: A monetary charge imposed by the government on persons, entities, transactions, or property to yield public benefit (the government “taking” your stuff).
Recently, there has been an abundance of discussion about President Trump’s plan to repeal the Estate Tax (the tax imposed on the transfer of property upon an individual’s death). We all have an estate, and we’re all subject to tax (we are, right?). So, it’s easy to see why the concept of the Estate Tax can bring about quite a public outcry.
Most of you are probably aware of the current Estate Tax Exemption amount (or the value your estate must surpass in order to be subject to the tax), which for 2017 is $5.49 million for an individual and $10.98 million for a married couple. That’s a pretty large number. Let’s take a look at a few more numbers:
- $19.3 Billion of Estate Tax revenue was generated in 2014 according to the U.S. Office of Management and Budget. That’s a big number, too; however, overall federal tax revenue was over $3 Trillion—translation;
- 6 % of our federal tax revenue was derived from the Estate Tax;
- 4,700 Estate Tax returns filed in 2013 had Estate Tax liability (out of 2.6 million total deaths in the U.S, according to Congress’s Joint Committee on Taxation), which equates to roughly;
- 1 out of every 500 people who die have Estate Tax concerns;
- 2% of Americans are subject to the Estate Tax.
So, what about repealing the Estate Tax? For 99.8% of Americans, it’s not really a monetary issue (based on the numbers—though we’re all allowed to object to it conceptually if so chosen). Some of those that aren’t subject to the tax may view it as another way for the extremely wealthy to avoid further taxation and see it as the rich to get richer and not contribute to and yield public benefit. Again though, we’re talking about 0.6% of our federal tax revenue. Everyone is entitled to their opinion on the matter. If you’re curious about my opinion, well, I don’t really have one either way. It exists right now, and may not exist in the future. Sure, I’ll always remain educated on the topic, and watch the political trends; but remember, we’re talking about less than 1% of our tax revenue.
In the end, and whatever your individual opinion is, I wanted to throw these numbers out there for this reason: if you happen to be sitting at a bar (or in any social situation) and the topic of Estate Taxes comes up, you may dazzle the person that is on an Estate Tax rant with some of these simple numbers. And maybe someone will buy you a drink!
We are always here for you if you have any questions or just wanting to keep up with all you need to know about estate taxes. If you have any questions please don't hesitate to reach out. Pick up the phone and call us (317) 863-2030. Or complete the short form here and we'll call you!