The U.S. "Death Tax": I wouldn't complain furball, ours is much worse, the highest in the world in fact. It actually employs a small corporation of Gov't employees just to collect and maintain income of this tax. .65 cents of each dollar collected goes toward this.
What is the rate of the estate, gift and generation-skipping tax
(which is really a Death Tax)?
After utilization of a $625,000 exemption, the rate of tax is 37% and once assets have reached the size of $3 million, the rate of tax is 55%.
What is the applicable lifetime exclusion amount?
The applicable lifetime exclusion amount is $625,000 in 1998 –- scheduled to increase in uneven increments to $1 million in 2006. It is the amount that an individual can pass, free of gift tax during life or estate tax at death to anyone they choose.
How much revenue is raised by the Death Tax?
A little over 1% of the government’s revenue was generated from the death tax in 1998.
What size estates file estate tax returns?
89% of all taxable estates filed in 1995 were $2.5 million or less in size.
Estates of what asset size pay estate taxes?
54% of all estate taxes paid in 1995 came from net taxable estates of $5 million or less.
What country has the highest rate of Death Tax?
Japan has an inheritance tax of 70%, but after credits and exemption it is an effective tax rate of 30.3%. The United States has the highest rate of estate tax in the world at the rate of 55% and an effective rate of 44%.
Is the Death Tax a disincentive for the growth of family businesses?
In a study conducted by The Tax Foundation it was found that to match the disincentive effect of the estate tax, income taxes would have to be raised up to roughly 70% or almost twice the top marginal income tax rate of 39.6%.
When is the "Death Tax" due?
The tax is due 9 months after the date of death, and is payable in cash.
What is the history of estate, gift and generation-skipping taxes?
The Death Tax was initiated in 1916 to fund World War I. It was maintained in the tax code through the 20’s and 30’s to help prevent the concentration of wealth. Since that time, anti-trust laws have eliminated those concerns, but to date the Death Tax remains intact.
What is the cost to collect the Death Tax?
It costs approximately 65 cents for every $1.00 of revenue for the collection and compliance costs of the death tax.
What is the general public’s attitude towards repeal of the death tax?
In national polls, focus groups and instant response sessions – 75% of respondents believe that the death tax should be repealed.
How many family businesses are there in America?
Within the definition that the family controls the business either by stock or through management, 91% of all businesses in America are family owned.
How does the death tax affect the succession of the family business to future generations?
More than 70% of family businesses do not survive the second generation; 87% do not make it to the third generation.
What is the generation –skipping tax?
The generation-skipping tax or GST is a tax on assets that you pass on to your grandchildren at an effective 80% rate, once you have utilized your GST exemption.
Have the assets that are taxed with the death tax been taxed before?
Yes. Those assets have been taxed with income tax and capital gains tax, as well as other taxes.
How many states have repealed inheritance taxes?
Twenty states have repealed inheritance taxes, five states (Delaware, Indiana, Kansas, North Carolina and Alaska) most recently in 1998 and 1999.
What is the economic effect of repealing the death tax?
In a study done by The Center for the Study of Taxation, it was determined that if gift, estate and generation-skipping taxes had been repealed in 1971, by the year 1991 there would have been 262,000 more jobs, $46.3 billion more in GDP and $398.6 billion more in capital.
How does the small business community view the death tax?
Unfavorably. 150 trade and industry organizations have formed the family business estate tax coalition, whose sole purpose is to repeal the death tax.
