There are few things in life more certain than death and taxes so said one of our founding fathers Ben Franklin.
Continue Reading Below
If Donald Trump wins the White House death will still be certain but it may be less expensive.
“No family will have to pay the death tax. American workers have paid taxes their whole lives. It’s just plain wrong and most people agree with that. We will repeal it,” said Trump while outlining his economic plan at the Detroit Economic Club on Monday.
For those looking to beat Uncle Sam, legally of course, the idea sounds good but don’t get too excited because you probably don’t qualify.
Most Americans don’t have to worry about filing estate taxes because for the average Joe total assets are typically not worth enough by Internal Revenue standards.
For example, a traditional estate may include a home, stocks, bonds and personal belongings such as jewelry or other family heirlooms. Unless this bundle amounts to $5.4 million, the benchmark required by the Internal Revenue Service for 2016, there is no need to file.
Continue Reading Below
However for wealthy folks, such as Trump, who boasts an estimated net worth around $10 billion [Forbes estimates it is half that] eliminating the estate tax would allow relatives to keep more of the family cash hoard as it gets transferred to survivors.
Turns out, this deep-pocketed group is not so big. Roughly about 10,800 estate tax returns will be filed for deaths in 2015 of which 5,300 will be taxable, according to the Tax Policy Center. That amounts to $18.4 billion in tax liability.
More simply the Center points out just 10% of earners pay the tax with over one-third paid by the 0.1%.
Along with Trump, others that fit the bill include Hillary supporter billionaire Warren Buffett and the Koch Brothers, Charles and David, who have yet to officially endorse either candidate despite being publically active in building a large donor network for policy and key congressional elections.
Because this group is so small, the potential boost to the economy is negligible. “There is no evidence that they [the wealthy] won’t keep investing in business”, said Roberton Williams, Sol Price Fellow, at the Tax Policy Center during an interview with FOXBusiness.com, even if they didn’t have to pay a death tax.
Even though it likely won’t move the needle on the economy, Williams notes 75% of voters say they’re opposed to a death tax thus scrapping it may have a psychological benefit, “People like to keep more money, pass less taxes” he notes.
Taxpayers will hear from Hillary Clinton on Thursday when she is set to deliver her economic blueprint. That too will take place in Detroit.