Skip to comments.Why More States Are Killing Estate Taxes
Posted on 06/16/2017 6:33:34 AM PDT by reaganaut1
Want proof taxes can actually go down? In the last three years, nine states have eliminated or lowered their estate taxes, mostly by raising exemptions.
And more reductions are coming. Minnesota lawmakers recently raised the states estate-tax exemption to $2.1 million retroactive to January, and the exemption will rise to $2.4 million next year. Maryland will raise its $3 million exemption to $4 million next year. New Jerseys exemption, which used to rank last at $675,000 per person, rose to $2 million per person this year.
Next year New Jersey is scheduled to eliminate its estate tax altogether, joining about a half-dozen others that have ended their estate taxes over the last decade.
This tax-cutting trend has been fueled by competition between the states for affluent and wealthy taxpayers. Such residents owe income taxes every year, but some are willing to move out of state to avoid death duties that come only once. Since the federal estate-and-gift tax exemption jumped to $5 million in 2011, adjusted for inflation, state death duties have stood out.
States are under pressure to keep pace with both the federal estate-tax exemption and exemptions in neighboring states, says Bruno Graziano, a senior analyst with information services firm Wolters Kluwer.
(Excerpt) Read more at wsj.com ...
Here's some even better news, too. High income tax rates are starting to get some scrutiny even in a Marxist sh!t-hole like New Jersey. Last year one of the wealthiest people in the state moved to Florida. If the estimates of his income were accurate, then the state may have lost somewhere between $50 million and $100 million in tax revenue from a single taxpayer. Poof! -- gone, just like that.
The maximum income tax rate in NJ is 9%. So he must have had an income between $500 million and $1 billion.
even in a Marxist sh!t-hole like New Jersey. Last year one of the wealthiest people in the state moved to Florida. If the estimates of his income were accurate, then the state may have lost somewhere between $50 million and $100 million in tax revenue from a single taxpayer. Poof!
New Jersey chases after people moving away from the state by adding tax surcharges on the sale of a home if you don’t buy another in New Jersey... Millionaires moving away are forced to buy a token property AND LIVE IN IT OR AT LEAST GET MAIL DELIVERED THERE LONG ENOUGH TO CLAIM RESIDENCE to avoid enormous taxes on their home/estate that they sold when moving to Florida... They can then sell the token condo or slum shack and take a much smaller hit on that property.
Receiving an inheritance from my aunt who lived in Iowa. Because she and her husband had no children her estate is being devided among four nieces and nephews. While Iowa has ended their death tax on direct descendent, as nieces and nephews we will be paying an estate tax of about $7k a piece on our share of this relatively modest estate.
I'm sure he does whatever he can to take advantage of tax shelters and other deductions, so it's unlikely that he paid 9% on that full amount.
For some time the state was very aggressive in chasing down wealthy taxpayers who moved out of state to avoid its onerous estate taxes. They would basically pry into the financial dealings of these wealthy taxpayers in an attempt to make the case that they were still New Jersey residents even if they spent much of the year in another state and used the other state as their official full-time residence for tax purposes. One of the ways they would do this was by documenting the taxpayer's continued involvement as volunteers in civic affairs and non-profit groups even after they allegedly moved out of the state.
Tax attorneys in New Jersey began advising their clients to start cutting their ties completely with charities and non-profit groups in the state when the moved out. As a result, you have many prominent New Jersey charities and civic organizations that have suffered financially because their biggest donors are cutting ties with them to protect themselves from the state's tax agents.
My uncle in California setup a trust that skips his kids because of taxes. The grandkids get the money. His kids are well off and receive money from the trust plus they split money on the sale of the house. $300k apiece...
New Jersey has a method of caluculating your taxable income that is very different than the Federal 1040. Most of the taxdodging tricks that are possible on a 1040 are disallowed in your NJ state income tax.
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