For a PDF of this document click here.
Americans for Tax Fairness sent a letter to Rep. Kristi Noem (R-S.D.) to clarify who is affected by the federal estate tax and correct Rep. Noem’s misrepresentation of Hillary Clinton’s proposal to assess a 65% tax rate on estates worth more than $1 billion per couple.
“It is important to realize that the requirements for paying federal estate taxes have changed substantially in the 22 years since your father’s accident. While his death may have triggered the estate tax in 1994 when the exemption from the tax was set at $600,000, today the estate would have to be worth at least $5.45 million (and $10.9 million for a married couple’s estate) before any tax would be assessed,” ATF Executive Director Frank Clemente wrote in a letter responding to Rep. Noem’s op-ed.
The estate tax applies to only the richest 0.2 percent of Americans and it is extremely rare for a family farm to be affected by it at all. Only about 20 small business and small farm estates in the entire country owed any estate tax in 2013, according to the Tax Policy Center. And because of the high exemption level, those that were affected paid an effective rate of just 16.6% on average.
“It’s important to note that it has not been shown that a single family farm has ever been lost as a result of the estate tax. At a Republican-led House Ways & Means Committee hearing last year, advocates for eliminating the estate tax could not provide evidence of any family farms that had been sold to pay estate taxes,” wrote Clemente
“Your op-ed criticized Hillary Clinton for proposing to increase the top estate tax rate to 65%, which would apply to estates valued at more than $1 billion per couple. But this would apply to very few Americans. In 2014, there were only 223 estate-tax payers with estates valued at $50 million or more—far below the $1 billion threshold proposed by Clinton—according to the IRS,” Clemente wrote.
For the full letter, click here.
For ATF’s recent editorial board memo celebrating the 100-year anniversary of the estate tax, click here.