Estate Tax

Eliminating Estate Tax on Inherited Wealth Would Increase Deficits and Inequality

Repealing the estate tax would swell deficits and worsen growing wealth inequality, while providing no benefit to 99.8 percent of Americans.

Background

Enacted in 1916, the estate tax is a tax on property (such as cash, real estate, stock, or other assets) that is transferred from deceased persons to their heirs.  It is best understood as a tax on inherited wealth because it applies only to large transfers of property. 

Legislation enacted in 2001 gradually phased out the estate tax by raising the exemption level and reducing the rate, leading to the tax’s temporary repeal in 2010. The tax was scheduled to return in 2011 under pre-2001 rules (an individual exemption of $1 million and a top rate of 55 percent), but policymakers have voted twice — most recently in the “fiscal cliff” deal early in 2013 — to continue it in much weaker form. 

By the Numbers

Estates Owing Federal Estate Tax

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