NCPA - National Center for Policy Analysis

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.

For text (subscription required): 

http://online.wsj.com/article/SB115750260563154554.html

 

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