ESTATES OF VIRGINIA
September 6, 2006
Soon it will be safe to be caught dead in Virginia. Recently, Democratic Governor Tim Kaine and the Republican-controlled legislature struck a deal to abolish the state's estate tax, says the Wall Street Journal.
- When a federal tax credit -- which allowed states to keep part of the revenue from estate taxes -- was abolished, many states cancelled the tax.
- But not at first in Virginia, which had decided in 1978 that it would go on collecting its death tax even without the benefit of a federal tax credit.
But more recent economic factors have induced the state to change its mind, says the Journal:
- The tax only brings in about $140 million a year to Richmond from several hundred estates.
- The levy has made it harder for Virginia to compete for small businesses and retirees, when 25 other states no longer have a death tax.
Additionally, legislators may also be looking to improve their image with voters, says the Journal, who recall the $1.5 billion tax increase that Republicans and Democrats alike imposed on them two years ago.
Source: Editorial, "Estates of Virginia," Wall Street Journal, September 6, 2006.
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