With all the hype of the 2016 presidential election, we all missed a very important birthday—the centennial birthday of the estate tax. On September 8, 1916, the estate tax was born. It was first enacted under Woodrow Wilson under the Revenue Act of 1916. Originally, there was a $50,000 exemption for U.S. residents with tax rates between 1% and 10%. In 2016 dollars, the exemption would safeguard $1.1 million with the top rate only applying to estates in excess of $110 million. However, at that early point in history, without the gift tax, the estate tax was easily avoided. Obviously, the estate tax has changed its appearance and approach during its 100–year lifespan. And, with the upcoming election, we could potentially see the estate tax get its next facelift.
See Laura M. Chooljian & Stephanie J. Lipson, Happy Birthday to the Estate Tax, Accounting Today, October 31, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
