Delaware has become the latest state to entertain the idea of eliminating its estate tax. The reason for doing so is interesting.
In doing so they are acting on the recommendation of a review panel created by the Democratic Governor. It turns out that the estate tax might actually be costing the state money.
Last year, the state took in $1.3 million in estate taxes. It is believed that the existence of the estate tax actually encourages wealthy, older residents to move to states without an estate tax.
This might cost Delaware more in income taxes than it receives from the estate tax!
Therefore, it makes financial and policy sense to eliminate the estate tax.
The Washington Times reported this development in a recent article titled "Republican lawmakers introduce bill to eliminate estate tax."
Many other states are currently debating eliminating their own estate taxes.
It is becoming clear that, at least at the state level, the estate tax does little to help the finances of the government. However, because the estate tax is always a hot button political issue for reasons other than government revenue, proposals to eliminate it often face uphill battles.
Thus, if your state has an estate tax that you would like to see eliminated, it would be a good idea to contact your state representative to let him or her know your opinion.
If you want to learn more about Estate Planing in Overland Park, KS (and throughout the rest of Kansas and Missouri), please visit my Estate Planning website.
Reference: Washington Times (May 29, 2015) "Republican lawmakers introduce bill to eliminate estate tax."