Kentucky Would Gain Little from Estate Tax Repeal
The U.S. House of Representatives is debating an end to the federal estate tax, but Kentucky probably wouldn’t benefit as much as other states.
There are only about 5,400 estates nationwide that will have to pay the estate tax. That’s because it only applies to individuals who bestow more than $5.4 million to their heirs.
This year there will only be about 40 estates in Kentucky that would be affected by repealing the estate tax. Meanwhile in New York, 430 estates would be affected---660 in Florida and 970 in California.
Those bigger, more populous states just end up having more people bequeathing more money to their children and relatives when they die. And right now, 40 percent of the value of those estates goes to the federal government. That number adds up: about $269 billion in revenue wouldn’t be collected if the estate tax is repealed.
Jason Bailey is the director of the Kentucky Center for Economic Policy. He says that repealing the estate tax would hurt Kentuckians because the state is so reliant on federal assistance.
“The budget cuts that would have to result from less tax revenue would certainly hurt all Kentuckians and hold our economy back and hold our quality of life back," Bailey said.
President Barack Obama says he will veto the bill if it passes.