Under current law, Americans can pass along homes, land, stocks or other assets worth up to $5.49 million without paying any estate or gift tax. Estates worth more than that are subject to a 40 percent tax. The House GOP bill would double the threshold to $11.2 million in 2018 and then do away with the tax entirely in 2024. For 2018, that means an estimated 3,200 people would not have to pay, a 64 percent reduction from the 5,000 people who would pay under current law.
Congress has already raised the threshold many times in an effort to ensure it is only the very rich who are paying the tax. In 2000, 52,000 estates had to pay the tax. Now it is down to 5,000.
In total, the reduction and ultimate elimination of the estate tax would cost the government $172 billion over a decade.
Thomas Piketty and Emmanuel Saez, experts on inequality, say that one of the main reasons the top 0.1 percent have become even wealthier is because they transfer money and property to the next generation without having to pay much tax on it.
The bill also keeps a popular loophole in the estate tax known as the "step up" basis. What this means is that if someone inherits a home worth $16 million today that was bought for $10 million years ago, then they would only have to pay the estate tax on the value of the estate worth over $11.2 million in the GOP plan. They would not have to pay any capital gains tax on the gain in the property value, a substantial savings.
https://www.washingtonpost.com/news/wonk/wp/2017/11/05/3200-wealthy-individuals-wouldnt-pay-estate-tax-next-year-under-gop-plan/?utm_term=.5a0693897c75
Congress has already raised the threshold many times in an effort to ensure it is only the very rich who are paying the tax. In 2000, 52,000 estates had to pay the tax. Now it is down to 5,000.
In total, the reduction and ultimate elimination of the estate tax would cost the government $172 billion over a decade.
Thomas Piketty and Emmanuel Saez, experts on inequality, say that one of the main reasons the top 0.1 percent have become even wealthier is because they transfer money and property to the next generation without having to pay much tax on it.
The bill also keeps a popular loophole in the estate tax known as the "step up" basis. What this means is that if someone inherits a home worth $16 million today that was bought for $10 million years ago, then they would only have to pay the estate tax on the value of the estate worth over $11.2 million in the GOP plan. They would not have to pay any capital gains tax on the gain in the property value, a substantial savings.
https://www.washingtonpost.com/news/wonk/wp/2017/11/05/3200-wealthy-individuals-wouldnt-pay-estate-tax-next-year-under-gop-plan/?utm_term=.5a0693897c75
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