In our previous post we discussed some of the political infighting surrounding the federal estate tax. Democrats generally want to increase the tax and lower the individual exemption, and republicans generally favor a lower estate tax with a higher individual exemption.
There are also politicians who want to abolish the estate tax altogether. In this time of financial difficulty and increasing deficit woes, repealing the estate tax seems like a foolish idea, but some groups say that a repeal of the estate tax would be economically beneficial to all Americans.
The American Business Foundation released a recent report concluding that the permanent repeal of the estate tax would raise $89 billion in the next ten years. The report uses a scoring method that considers the effect of an estate tax repeal on larger economic trends and other taxes according to Forbes’ Estate of Confusion blog.
The report claims that GDP would increase 2.25 percent with the repeal of the estate tax. The repeal would also cause private sector output and labor income to increase 2.34 percent and capital stock would jump by 6.1 percent. Federal taxes on this economic growth would apparently offset the money brought in by the former estate tax.
Regardless of the theoretical and economic debates surrounding the legitimacy of the estate tax, the federal estate tax still exists and is an estate planning concern for many Georgia families. An experienced estate planning attorney can help Georgia families arrange their affairs in a matter that minimizes their tax liability and helps them best achieve their goals.
Source: Forbes Blogs: Estate of Confusion, “Donald Trump: What About The Estate Tax?” Hani Sarji, 4/27/11