A recent vote in the House of Representatives came out in favor of repealing the estate tax, a topic that many Americans feel strongly about. The subject has not come up for a similar vote before the House in the past decade, which some lawmakers feel makes the matter worthy of a fresh look. The issue has certainly led to debate within the legislature, as well as among Oklahoma residents who hold strong opinions on the estate planning subject.
In estate planning circles, the estate tax is often a non-issue. Only those individuals who have amassed an estate worth more than $5.43 million are subject to the tax, and married couples are allowed twice that amount, or $10.86 million. This means that only approximately 0.2 percent of individuals who will pass away in 2015 would be subject to the estate tax.
The issue strikes a nerve with many, raising ire on both sides of the aisle. Republicans point out that many small business owners find themselves at risk of losing a large portion of their accumulated wealth upon death, as the estate tax is nearly 40 percent of wealth that surpassess the exemption. Furthermore, many who are successful but not ultra-wealthy do not have access to the complex estate planning tools that can reduce the estate tax burden.
Democrats, on the other hand, view repealing the estate tax as just one more move aimed at protecting the nation's wealthiest citizens, while asking those with lower levels of income to continue to shoulder considerable tax burdens. They assert that those who are most able to pay a high estate tax should continue to do so. Many also point out that the elimination of the estate tax would lead to a $269 billion loss of tax revenue over the next decade.
The matter is expected to continue to raise debate as the proposed change makes its way through the legislative process. The House vote did not result in an overwhelming majority, and the 240-179 breakdown did not stray far from the predictable party lines. For those in Oklahoma who are concerned about the possibility of incurring the estate tax, the best way to address the issue is to make an appointment with an estate planning attorney, rather than waiting to see if the tax is repealed.
Source: thehill.com, "House votes to repeal estate tax", Bernie Becker and Cristina Marcos, April 16, 2015