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Eliminating estate tax provides tax cut to North Carolina’s wealthiest individuals
Posted By Cedric Johnson On May 8, 2013 @ 4:30 pm In NC Budget and Tax Center | Comments Disabled
Comprehensive tax reform remains vague and “short on details” as the 2013 legislative session is beyond its halfway point. Nevertheless, stand-alone bills continue to make their way through the legislative process that would provide tax cuts to the state’s wealthiest individuals. Policymakers have just voted in the House to eliminate the estate tax and both the Senate leadership and the Governor have stated their commitment to do the same.
Proponents of eliminating the estate tax argue that the tax punishes small businesses and small farms in North Carolina. Evidence shows this claim to be false. The estate tax applies to a small number of taxpayers in North Carolina – less than one percent. For tax year 2011, only 23 North Carolina tax filers were subject to the estate tax, according to the North Carolina Department of Revenue. The reality is that the overwhelming majority of small businesses and small farms will not a pay an estate tax while heirs of the wealthiest estates in the state will.
Moreover, the claim that small, family-owned farms would have to sell their farms to pay the estate tax does not align with available evidence. For 2013, the amount of an estate’s value that can be excluded for tax purposes increased to $5.25 million. The Tax Policy Center estimates that only 20 small businesses and farm estates  nationwide are estimated to owe any estate tax in 2013 – this equates on average to less than one small business or farm per state.
Efforts to eliminate the estate tax will only further the tax shift underway through other proposals that offer tax cuts for wealthy individuals and corporations while shifting the tax load to low- and middle-income taxpayers. For example, at the same time that the estate tax is being eliminated for 23 estates, the state Earned Income Tax Credit (EITC) is slated to be cut for FY2013 and will expire at the end of the year, which will impact nearly 907,000 North Carolinians. Such efforts do not support growing the economy and certainly do not promote economic opportunity for all North Carolinians.
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URL to article: http://pulse.ncpolicywatch.org/2013/05/08/eliminating-estate-tax-provides-tax-cut-to-north-carolinas-wealthiest-individuals/
URLs in this post:
 only 20 small businesses and farm estates: http://www.cbpp.org/files/estatetaxmyths.pdf
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