Repealing Estate Tax Benefits Few, Harms Many
Twenty-three. This is the number of tax filers that were subject to the estate tax in North Carolina for tax year 2012 according to data from the NC Department of Revenue. The small number of taxpayers paying estate taxes doesn’t support claims made by proponents of eliminating the estate tax. Members of the House Finance committee recently voted to repeal the estate tax, with proponents claiming that the estate tax punishes those who have accumulated great wealth across North Carolina.
The estate tax only applies to the wealthiest individuals in the state and changes made to the estate tax as a part of the fiscal cliff deal will likely result in even fewer estates in North Carolina paying the tax. For 2013, the estate tax is only levied on the portion of an estate’s value that exceeds $5.25 million. In 2012, the tax year for which data is available, the threshold was $5.12 million.
Repealing the estate tax does not address any of the issues with the state’s upside-down tax system while providing beneficiaries of multi-million dollar estates a tax break. Furthermore, repealing the tax will reduce the availability of dollars for investment in the foundation of economic opportunity.