What a difference a year makes.
The nation's capital has collected $29 million so far this year in estate taxes.
Actually, that's just money taken in through February. And it's already very close to District of Columbia chief financial officer's projection that the city would collect a total of $35 million this year.
"I hesitate to say we will collect more estate taxes because that would mean some untoward happening in certain parts of the city," D.C. CFO Natwar Gandhi told the city council last week.
Gallows humor aside, the money is quite welcome by the leaders of America's capital city, which is facing a $322 million shortfall.
They've been exploring new ways, such as imposition of tax on professional athletes, to raise money. But the unexpected estate tax windfall could make the jock tax and other potential tax hikes on D.C. residents less pressing.
Federal, state estate tax connection: The federal estate tax disappeared from the Internal Revenue Code in 2010. Many state that based their collections on the federal levy saw their estate taxes phased out earlier than that.
But the District decoupled from the federal system and continued to collect from estates.
The District does have, however, a lower estate tax limit than Uncle Sam. Estates valued at $1 million or more must pay the Washington, D.C., estate tax. The federal threshold that took effect with the Jan. 1 resurrection of the estate tax is $5 million.
And now that the federal estate tax is back, it will be interesting to see how much money the levy will return to treasuries at all levels of government.
The forgone revenue — Steinbrenner and Duncan, just to name a couple of mega estates that went untaxed in 2010 — that will be coming back into coffers could be key in determining whether any states or Uncle Sam will be able to permanently killl the estate tax.
Related posts:
- State issues with estate taxes
- Estate tax overview and tips
- Estate tax options for 2010 decedents
- Estate tax extension through 2012: Nudging mama off the train
in two years? - Will estate tax stay dead?
- The Boss' estate tax bonanza
- Texas billionaire vs. the estate tax
- Senate rejects permanent estate tax death
- State Tax Departments
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Rob Smith
In the Federal City – we need a revelution on Estate Taxes: Pay the government in a way that doesn’t destroy jobs or the asset itself.
The Americans Standing for the Simplification of the Estate Tax – ASSET, have developed a method to do just that.
By allowing people to pay the estate tax, based on their AGI of 1 Million or more, each year, you pass assets to heirs at original basis. Guess what…the DC government will more than recoup it’s money when the capital gains tax is paid on the sale of those assets if, and when, they are sold. If they are not sold, because the private business is still going with the heirs, DC benefits from the jobs that are still paying taxes.
It’s a good idea. Check out SimplifyEstatateTax.org
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