Repealing the Estate Tax

The estate tax is so narrow that it only affects about 5,500 wealthy American households per year.  Now, Congressional Republicans want to eliminate the tax altogether, creating a bonus for heirs. The move to repeal the estate tax, thereby ensuring that heirs would not owe any capital gains taxes on the increased value of assets over the deceased’s life, would let billions of dollars in income and assets escape all U.S. taxes.

Ed McCaffery, a law professor at the University of Southern California, says that the bill makes no sense, “[I]t would get a bad grade in a law school final exam . . .  [it] is telling old people, clutch onto things until they die.  That’s not how the American economy works.”  However, repeal is unlikely to happen anytime soon, especially with Obama proposing higher estate taxes. 

See Bloomberg News, Why Republicans Want A Bigger Estate Tax Repeal Than Ever, Private Wealth, Apr. 13, 2015.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.