Authored by: Paul J. Sowell, Esq.
In a day of shrinking state coffers you would think that more and more states, in a last chance to grab revenue, would be looking to the estates of their deceased wealthy residents as a source of money. Actually, you would be wrong. The growing trend among states which have a gift and/or estate or inheritance tax regime has been to repeal these onerous taxes. Why would this be you may ask? An interesting study published this year by the Beacon Center of Tennessee looked at Tennessee’s death and gift taxes and concluded the following:
“Had Tennessee eliminated these taxes a decade ago, the state would have created an additional 200,000 to 220,000 new jobs.
Tennessee’s gross state product would have been between $6 billion and $18 billion greater without these taxes over that time period.
Tennessee’s asset base would have increased by at least $16 billion and as much as $48 billion as a result of eliminating the taxes.”
It appears that the short term gain of revenue from these taxes is greatly offset by the chilling effect they have on the job creators and revenue producing small businesses which often feel the brunt of theses transfer taxes.
Following in the footsteps of Ohio, which last year abolished its estate tax, Indiana recently repealed its inheritance tax for deaths after December 31, 2021. Indiana now joins the 29 other states that do not impose taxes at death. It appears that Oregon’s death tax may be the next to fall into its own grave, as there is wide support for an initiative on the November ballot to abolish the death tax. We will monitor what happens in Oregon and the rest of the states and keep our readers posted on this important issue.