SENATE BILL: Responsible Estate Tax Act (At Final Vote)

[Fmr. Representative Encke]

This act would turn the current Estate Tax into a more progressive and fair tax on inheritance. This bill will result in a lower level of wealth inequality and generate considerable revenue for the Federal government. I encourage all of my colleagues to debate this bill and pass it as soon as possible.

I'll have a separate cost analysis ready shortly. Your numbers may not be correct in this context becasue the estate tax estimate from the FY2019 budget was 29 billion (due to changes from RL made last year).

[Fmr. Representative Encke]

I'm almost done with this. It took longer than expected because the RL exclusion amount is way higher and so recent data isn't available for estates in the 3.5-5 million range and I had to find other sources.

Question: In your amendment (Section 2.11 and 2.12), is the intent to exempt those categories from estate tax so long as they are valued below 50 million? If so, that should probably be clarified in the bill, because as written, it seems to suggest that the tax rate is still 50% in the 10-50 million range and then decreases to 20% above 50 million (I might be mistaken, idk).

[Fmr. Representative Encke]

Analysis of Estate Tax Plan

Important Note: In the FY2019 budget I listed an estate tax and a 'flat tax.' That was incorrectly labeled 'flat tax' (because I had copy/pasted the template that I used to calculate the payroll taxes) and should actually be labeled the gift tax. Therefore the estate tax revenues from 2019 were actually 27.9 billion, not 29.6 billion.

That being said, here is the analysis of the estate tax bill. The original (unamended) bill raises around 38.7 billion dollars, which is fairly consistent with the 'more than 35 billion' estimate from DC. Since the estate tax was already raised to 45% last year, this represents a smaller increase in revenues than it would if it were being applied in RL. Also the farm/business exemptions lower revenues to 34.5 billion, which is the final estimate, and represents a net increase of 6.6 billion from last year's numbers.