Estate Tax Analysis: How Much Revenue Does the Estate Tax Raise?
The Congressional Budget Office has just released an Issue Brief on Federal Estate and Gift Taxes, setting forth the revenue that the estate and gift tax raises, how such revenue is affected by the various proposals for estate and gift tax reform, and a detailed explanation of the various reform proposals.
Among the highlights:
- Estate and gift tax receipts have averaged about 1.5% of federal tax revenue over the last few years
- Larger estates pay a significant portion of the estate tax. In 2007, taxes on gross estates valued at more that $20 million were 36% of total estate tax revenue, and taxes on estates valued at more than $10 million accounted for 55% of total estate taxes.
- A permanent repeal of the estate tax would cause a revenue loss of approximately $500 billion between 2010 and 2019.
- Under current law, the 55% rate with a $1 million exemption is set to be reinstated in 2011 without a new law being put in place. This is the rate structure that was in place in 2001. If the federal government puts the 2009 rate structure in place for 2010 and beyond (45% rate with $3.5 million exemption), the loss in revenue as compared to doing nothing would be approximately $233 billion.
