The recent repeal of the state death taxes in Indiana has put additional focus and scrutiny on states which still do have state inheritance or estate taxes.
that after Indiana’s recent repeal of its death tax, 22 states plus the District of Columbia still have some form of estate or inheritance taxes. However, many of those states – such as Ohio, North Carolina and Illinois – have made moves to raise their exemptions or otherwise limit its impact.
“Once a few states get rid of the death tax, it becomes an argument in other states in terms of being competitive,” Palmer Schoening, director of federal affairs for the American Family Business Institute, told the news source. “Capital is really mobile, and people are too.”
New Jersey tax law, on the other hand, has stayed in the opposite direction, as it has both estate and inheritance taxes on the state level. Only Maryland also has both taxes in place.
Analysts have said that high estate or inheritance taxes could drive many families away from the state unless changes are made.
“There’s a huge amount of baby boomers who will be retiring in the coming years,” Chris Edwards
, Director of Tax Policy for the conservative Cato Institute
, told Reuters last summer. “States shoot themselves in the foot if they scare away their higher income retirees. With the internet and cheap air fare, they’re more mobile than ever.”
Governor Chris Christie has spoken out, saying in his budget address last year that New Jersey estate law was hurting the state and pushing for the state’s exemption to be raised to $1 million. However, that proposal was met with stiff opposition.
The recent repeal of the state death tax in Indiana has put additional focus and scrutiny on states which still do have state inheritance or estate taxes.