20 Pages Posted: 10 Sep 2015 Last revised: 8 Jun 2016
Date Written: September 8, 2015
September 8, 2016 will mark the one hundredth anniversary of the federal estate tax. As with many longstanding marriages, America’s commitment to the estate tax has waxed and waned through the years. Our ardor built slowly, growing from the honeymoon years (impacting less than 1% of decedents with an inflation-adjusted exemption of around $1 million and a 10% top rate on estates over $100 million, raising less than 1% of all federal tax revenues) to a mid-marriage peak (impacting more than 7% of decedents with a $350,000 exemption and a 77% top rate on estates over $160 million, raising nearly 10% of federal tax revenues). But our passion has steadily cooled since then, culminating in a one year trial separation in 2010 and today’s withered estate tax (impacting less than 0.2% of decedents with a $5.4 million exemption and a 40% top rate on estates over $6.4 million, raising less than 0.6% of federal tax revenues).
Yet the initial reasons for our commitment to the estate tax – to raise revenue during a time of war, enhance the progressivity of the tax system, and curb concentrations of wealth – are even more compelling today than they were in 1916. This Article argues that we should rededicate ourselves to the vibrant estate tax of our youth.
Keywords: Tax, Estate Tax
JEL Classification: K34
Suggested Citation: Suggested Citation
Caron, Paul L., The One Hundredth Anniversary of the Federal Estate Tax: It's Time to Renew Our Vows (September 8, 2015). Boston College Law Review, Vol. 57, p. 823, 2016; Pepperdine University Legal Studies Research Paper 2015/14. Available at SSRN: https://ssrn.com/abstract=2657888