That number was before the new estate tax exemptions were put in place by the Tax Cuts and Jobs Act of 2017. Now, the first $11.4 million of a single person’s estate is exempt from the tax. For a married couple, it is $22.8 million. When most of us think of a family-owned business or farm, we tend to envision something far more modest than a company valued at almost $23 million. If only 80 estates owed taxes on their family owned farms and businesses under the older exemption, now that the exemption has been doubled, that number will fall a lot. I wouldn't be surprised if it declines to single digits.
Apart from owners of family-run businesses and farms, in any given calendar year, about 2.8 million Americans will die. Of all those, only 11,000 will result in an estate-tax filing. Historically, only about 5,200 owe estate taxes -- and that was before the Trump tax law changes. The increase in exemptions will bring that number down a lot.
What's more, the average estate pays tax of 16.5 percent of assets, according to the Center on Budget and Policy Priorities. That's less than half the 37 percent top marginal rate on regular income.
Of course, the easiest way to avoid estate taxes is to give it all away. Warren Buffett decided to dispose of his entire fortune via the Bill & Melinda Gates Foundation, run by his pal Bill Gates. Uncle Sam’s take on that $85 billion fortune is zero.
Since almost no one pays this tax, the complaints about it have little or no merit. If this were actually a problem, there would be no need to build a case based on misrepresentation. The facts do all the talking here.
This column was provided by Bloomberg News.