The death of the estate tax has been greatly exaggerated.
Federal estate tax collections fell 22% from a year ago in fiscal 2010, to $16.9 billion, the IRS said Monday. That’s the lowest since 1997.
Collecting less in taxes from the rich is not a wise policy at a time of trillion-dollar deficits, obviously. Still, you’d have to say that’s not a bad take for a year in which the estate tax rate was zero.
So what’s going on, were people volunteering to pay the dreaded death tax?
Alas no. As the IRS explains in its latest annual data book, last year’s collections cover those who died in previous years but whose estates didn’t file returns till fiscal 2010, which ended in September.
The bad news for the wealthy and infirm is that the estate-tax loophole has closed. The budget deal reached last fall reinstates the estate tax, though it raises yet again how much dough you have to have before you pay it.
The filing threshold was $1 million in assets through 2003, $1.5 million for those who died in 2004 and 2005, $2 million for deaths in 2006 to 2008 and $3.5 million in 2009. Those dying in 2011 will have to have $5 million on hand before filing is mandatory.
Not that being worth $5 million would make you rich, needless to say.
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- The rich don’t think they’re rich
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