Why More States Are Killing Estate Taxes

[SirLinksALot]

SOURCE: WALL STREET JOURNAL

URL: https://www.wsj.com/articles/why-more-states-are-killing-death-taxes-1497605401

by Laura Saunders


Want proof taxes can actually go down? In the last three years, nine states have eliminated or lowered their estate taxes, mostly by raising exemptions.

And more reductions are coming. Minnesota lawmakers recently raised the state’s estate-tax exemption to $2.1 million retroactive to January, and the exemption will rise to $2.4 million next year. Maryland will raise its $3 million exemption to $4 million next year. New Jersey’s exemption, which used to rank last at $675,000 per person, rose to $2 million per person this year.

Next year New Jersey is scheduled to eliminate its estate tax altogether, joining about a half-dozen others that have ended their estate taxes over the last decade.

This tax-cutting trend has been fueled by competition between the states for affluent and wealthy taxpayers. Such residents owe income taxes every year, but some are willing to move out of state to avoid death duties that come only once. Since the federal estate-and-gift tax exemption jumped to $5 million in 2011, adjusted for inflation, state death duties have stood out.

“States are under pressure to keep pace with both the federal estate-tax exemption and exemptions in neighboring states,” says Bruno Graziano, a senior analyst with information services firm Wolters Kluwer.

(Excerpt) Read more at above link...

[jmyrlefuller]

All are also cold-weather states that most people don't consider retirement havens.

Unlike the federal government, states have no real citizenship enforcement. Because our federal government allows free movement from state to state, one needs only to move to a low-tax state, or transfer funds to an out-of-state bank account, to avoid any estate tax.