CHARITABLE COST OF REPEALING ESTATE TAX
Oct. 31, 2017
With estate tax repeal possibly looming on the horizon, some are starting to warn that it could hurt charities to repeal the tax.
At this point, it is unknown whether the estate tax will be repealed. President Trump would like to repeal this tax and Congressional Republicans are generally in agreement with that.
Any estate tax repeal would come out of a larger tax reform or tax cut package, however.
To reach an agreement, the President and Republicans will likely need to drop some of their plans, especially if they need Democratic votes to pass the final legislation.
With estate tax repeal being an issue, people are beginning to discuss what it might mean.
Some are pointing out that it could hurt charities, as Financial Advisor reports in "Estate Tax Repeal Could Cost Charities, Attorney Says."
One of the many methods that wealthy people use to shrink the size of their estates below the estate tax exemption is to give some wealth away to charities. The fear is that, without the need to shrink the size of their estates, the wealthy will stop giving to charities.
The obvious counter to this is that the estate tax is not the only reason wealthy people give to charities – or even the primary reason. Wealthy people give money because they believe in being charitable and the estate tax is just an extra, but unnecessary, incentive.
It is expected that this and other discussions about the estate tax will continue as legislation makes its way through Congress in what is expected to be a very long process.
Reference: Financial Advisor (Sep. 11, 2017) "Estate Tax Repeal Could Cost Charities, Attorney Says."