James F. McDonough
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732-568-8360 jmcdonough@sh-law.comFirm Insights
End the Double Taxation Created by the Estate Tax
Author: James F. McDonough
Date: June 12, 2015
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Double Taxation & the Federal Estate Tax
As many lawmakers push to end the federal estate tax for good, one national senator has written a letter to the Twin Falls Times-News, contending that this particular policy may be one of the least fair taxes on the books due to the double taxation it creates. In the piece, Sen. Michael Dean Crapo, R-Idaho, voiced his support for scrapping the policy and lamented the impact it has had on residents of his home state.
Crapo is certainly not alone in this sentiment, as many have stated that the levy can interfere with families passing down their small businesses.
Those looking to garner support for eliminating the measure entirely have repeatedly pointed to instances where entrepreneurs had to sell their companies even though they had remained in the family for generations.
Effects of the Policy
Those unlucky enough to trigger this levy have a 40 percent tax to pay, and Crapo noted IRS figures indicating Idaho residents with taxable federal estates footed an average federal estate tax bill of $1.6 million in 2013. In addition to generating this liability, many families invest significant time, energy and money into estate planning to meet their obligations.
Overcoming these hurdles can be even worse in certain areas where land values have soared, presenting the owners of this property with high tax burdens, the Republican senator noted. No small business owner should be prevented from passing their life’s work on to their children.
Over the last several years, lawmakers have focused a great deal on tax reform. Since 2000, government officials have enacted several changes to federal tax law. However, Crapo emphasized that they have failed to create the policies needed to put our economy in a better place, which would include simplifying the tax code, making the tax base larger and cutting rates for Americans. If lawmakers are truly interested in creating jobs and stimulating the economy, they should start by eliminating the death tax for good.
- Practices: Tax and Trusts & Estates, Estate & Trust Litigation, Real Property Tax Strategies
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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