I’m the kind of person who reads about taxes in my spare time. I’m not saying everything I read is a page-turner, though the book Showdown in Gucci Gulch, chronicling the landmark 1986 federal tax reform and written by two Wall Street Journal reporters, is riveting.
Anyway, in the course of my reading I’ve come across some little-known facts about the estate tax (refresher: it’s an inheritance tax on extremely wealthy estates):
- A recent state-by-state analysis of the impact of the estate tax finds less than one percent of all estates in the United States were subject to the tax (and just 0.6% in Minnesota, or 230 estates) in 2006. In other words, this is not a middle-class tax.
- Andrew Carnegie, Teddy Roosevelt and even Herbert Hoover were strong supporters of the estate tax. To quote Carnegie: “The parent who leaves his son enormous wealth generally deadens the talents and energies of his son, and leads him to lead a less useful and less worthy life than he otherwise would.”
- The Gallo brothers – the California winemakers – took a much different tack than Carnegie. In 1986, they successfully lobbied for their own exception to the estate tax, so they could pass on more than $80 million to their grandchildren, tax-free.
And finally, take a look at our recently published issue brief on the same subject, with Minnesota-specific statistics.