Death Taxes Will Become Inevitable For More People
January 25, 2000
Despite longstanding complaints about the death tax, little has been done about it because it hits comparatively few people.
- Polls show the 84-year-old estate tax is loathed by up to 70 percent majorities.
- However, until recently, only a little more than one percent of estates have been hit, since the estate would have to be worth at least $650,000.
- Stories about breakups to pay the tax involve fewer than 10,000 family farms or businesses of the 24 million U.S. firms.
However, the politics and economics of the estate tax are changing, observers say. The booming stock and real estate markets are creating new wealth that will be passed onto the next generation in the ensuing 20 years.
- From 1998 through 2017 the parents of baby boomers and some older boomers will leave estates worth $12 trillion to $18 trillion, the largest transfer of wealth in history.
- It will include as many as 2.8 million estates worth a million dollars or more over 20 years.
According to a study by the Social Welfare Research Institute at Boston College, the number of people hit by the estate tax could jump from 23,215 in 1990 to more than 100,000 by 2017 -- five percent of all deaths.
Now, GOP presidential hopefuls George W. Bush and Steve Forbes are both pushing plans to eliminate the tax, as are all other Republican rivals except John McCain, who would raise the limit to $5 million. Many people who don't make enough to pay the tax also oppose it, observers say, because it runs counter to their dreams of striking it rich and passing wealth on to their children.
By contrast, Al Gore and Bill Bradley support the status quo. Bill Clinton vetoed a tax cut bill last summer that included an estate tax phase-out.
Source: Owen Ullman, "New Wealth Will Make 'Death Tax' Hit Home," USA Today, January 25, 2000.
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