The U.S. House of Representatives voted earlier this month to repeal the Federal Estate Tax. Republicans have long voiced their opposition over this tax but a vote to repeal hasn’t occurred in over a decade. The measure passed with 240 in favor and only 179 opposed. The vote breakdown was almost entirely on party lines with 7 Democrats joining Republicans in favor of repeal. However, there aren’t enough votes in the Senate and the President would likely veto the repeal so Estate Taxes aren’t going away anytime soon. However, this move sets up a potential repeal in the future especially if Republicans gain more seats in both houses of Congress and the Presidency in 2018.
As previously discussed here, the Estate Tax exclusion amount is currently $5,430,000 (and is indexed for inflation). So, if you die with less than that amount in your estate, you pay no estate taxes. The Tax Policy Center estimates that only 2 out of every 1,000 people who die pay any estate taxes. Most families won’t have to worry about this tax at all. The President’s Budget includes a provision lowering the exclusion amount to $3,500,000 which would open that tax liability for more individuals and families, but the vast majority of Americans would still be entirely unaffected by this tax. It will be very interesting to see what happens to the Estate Tax in the next few years.