29 November 2021 - Podcast
On 16 April the House of Representatives voted to repeal estate tax, currently 40% with a $5.5 million exemption for individuals and an $11 million exemption for couples. The debate is an ongoing one, with the Republican majority arguing that elimination will aid the economy, sparing family-run businesses and smallholdings. Democrats criticize the move as a hand-out to the wealthy and say that repealing it would cost the treasury in the region of $270 billion over 10 years. The bill must be passed by the Senate in order to proceed, and no date has been set for a vote as yet.
Research has shown that estate taxes encourage charitable giving, both during life and on death as wealthy individuals are incentivised to reduce the size of their taxable estate. Elimination is likely to have a detrimental impact on donations to charity.
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