Who Pays The Estate Tax?
March 1, 2001
Some Democrats have suggested as an alternative to estate tax repeal that the value of estates exempted from the tax -- which is already scheduled to gradually rise to $1 million -- be increased to $5 million or even $20 million. How much tax do estates of various sizes pay now?
According to U.S. Treasury Department estimates for 2000, the estate and gift taxes together raised $29 billion -- with the death tax raising just $20 billion of that.
- Estates with taxable returns between $600,000 and $1 million paid $921 million, from 20,106 estates, for less than 5 percent of the total.
- The 19,846 taxable estates between $1 million and $2.5 million paid $4.85 billion, or 24 percent of the total.
- The 4,633 estates between $2.5 million and $5 million paid $4.19 billion, or a little less than 21 percent of the total.
Thus about 49 percent of the estate tax is paid by estates under $5 million.
- The 2,524 estates between $5 million and $20 million paid another $5.98 billion, 29 percent of the total.
- The 374 estates of $20 million and up paid $4.41 billion, or under 22 percent of the total.
Thus raising the estate tax exemption to $5 million would initially cut death tax revenues almost in half. And raising the exemption to $20 million would cut revenues by more than three-fourths.
Source: "Examining the State of the Estate Tax," Wall Street Journal, February 26, 2001.
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