WASHINGTON D.C. ESTATE TAX REDUCTION
In a controversial move, the government of Washington D.C. has decided to continue its previous plans to reduce its estate tax.
The City of Washington D.C. used to have one of the strictest estate taxes in the country. Only $1 million of estate assets were exempted from the tax.
State governments have recently followed a trend of reducing their estate taxes, in part out of fear that older wealthy people will move to other states that do not have the tax at all.
While not a state, the District of Columbia made plans to do the same thing in 2014. Government officials were concerned about meeting budgets, so revenue goals were set that would automatically cause an increase in the estate tax exemption.
As a result, in 2017 the exemption has gone up to $2 million and it will rise to meet the federal estate tax exemption of $5.49 million in 2018.
Forbes reported this development in "District of Columbia Slashes Estate Tax."
The issue is not without local controversy, since some people believe the revenue goals are not being met. City Council recently rejected an amendment that would have kept the estate tax exemption at its current rate.
The council will have to vote again on the issue, but it is unlikely that it will change.
For those who are opposed to estate taxes in general, this is good news. It still remains uncertain what will happen with the estate tax at the federal level.
The trend to reduce the estate tax burden generally continues for now.
Reference: Forbes (May 31, 2017) "District of Columbia Slashes Estate Tax."