McCrory: Estate Tax Unfairly Punishes Farmers, Small Biz; NC Justice Center: A Tax Cut for the .2 Percent

Bookmark and Share

Compiled by Jesse Wood

Feb. 21, 2013. Last month, Forbes Magazine mentioned North Carolina in an article titled “Where Not To Die In 2013,” referring to the estate tax or as Governor Pat McCrory calls it, the death tax.

Gov. McCrory

Gov. McCrory

One of his campaign promises was to abolish the tax.

“North Carolina is now the only state in the Southeast with the death tax. This tax unfairly punishes those who would inherit their loved one’s possessions or business, forcing some families to sell off a small business or family farm just to pay the tax. As governor, Pat McCrory will fight to eliminate the death tax for North Carolinians,” McCrory pledged.

Republicans in the House are moving House Bill 101, which would abolish the estate tax, along. 

According to the Charlotte Observer, “The repeal would mean $52 million in lost revenues for the state during the fiscal year starting July 1, increasing to $66 million in the 2017-18 fiscal year, according to fiscal researchers for the General Assembly. About 1 in 500 estates – 0.2 percent – are subject to the tax, the researchers said.”  

Here is a conservative and liberal groups’ take on the the Estate Tax/Death Tax:


 

Americans For Prosperity Applauds efforts to Kill the Death Tax
House Committee takes first key step to ending punishing tax

Americans For Prosperity

Americans For Prosperity

Americans for Prosperity-North Carolina today applauded efforts in the North Carolina General Assembly to end the state estate tax, also known as the death tax.

“The death tax chases capital and investment away from North Carolina to other states, including our neighbors who have repealed this punitive tax,” said Woodhouse.

“This tax raises little money and likely costs the state money, because many people who are subject to this tax simply move. Repealing the death tax would be good for North Carolina family-owned businesses and farms.”

AFP fully supports House Bill 10, which would repeal the estate tax in North Carolina.

A full 34 states do not have an estate tax.

Only 16 states impose an estate tax.

Nearby South Carolina, Georgia, and Virginia do not impose an estate tax or an inheritance tax and Tennessee is planning to sunset the death tax.

“Eliminating the death tax is a good way to implement a straightforward reform that protects our important family farms and family-owned businesses from double taxation, simplifies the tax code, reduces administrative and compliance cost, attracts job creators to relocate to NC, makes us more competitive with our neighboring states, with minimal impact to our general fund revenues,” said Woodhouse.

Americans for Prosperity (AFP) is a nationwide organization of citizen-leaders committed to advancing every individual’s right to economic freedom and opportunity. AFP believes reducing the size and intrusiveness of government is the best way to promote individual productivity and prosperity for all Americans.  For more information, visit www.americansforprosperity.org


 

Statement from the Budget & Tax Center at the North Carolina Justice Center

NC Justice Center

NC Justice Center

The state estate tax is a critical tool that supports broader economic opportunity and wealth-building in North Carolina. It also addresses the upside-down nature of our state’s revenue system, since it affects very few North Carolinians – those with multi-million-dollar properties.

Unfortunately, the House Finance Committee today passed a total repeal of the estate tax. It is worth considering the impact such a radical policy shift would have on North Carolina’s finances and economy.

In 2010, a mere 123 North Carolina estates in total were impacted. That was only 2 out of every 1,000 decedents in 2010.  Under current federal law, the move to a higher threshold of $5.25 million will mean even fewer estates will be affected.

It is well worth noting that while this move would provide a tax cut for a handful of estate beneficiaries, efforts are being made simultaneously to reduce the value of the Earned Income Tax Credit, which would impact over 900,000 individuals in North Carolina who earn less than $52,000 a year.

Repeal of the estate tax in North Carolina would reduce state tax revenue by nearly $300 million over the next five years, according to the Fiscal Research Division.  Such a loss in state revenues, if addressed through cuts, will undermine the wealth-building investments in our state: education from pre-K to university, job training at community colleges, investments to encourage research and development and strong courts to fairly and efficiently address disputes between businesses.

There are almost no North Carolina small businesses or farms among the very few estates with any estate tax liability.  The Tax Policy Center estimates that in 2012 only 40 small businesses and farms would pay the estate tax.

There are also many estate tax provisions that make it easier for those few small businesses and farms affected to pay the estate tax, including special assessments and deductions as well as spreading the payments over 14 years. Furthermore, there is no evidence that even the very few small-business or farm estates that owe estate tax would face the prospect of being liquidated.

The research on all aspects of the matter leads to several clear conclusions.  Repealing the estate tax will move North Carolina in precisely the wrong direction. Truly equitable and adequate revenue modernization simply cannot exist without preserving the estate tax.  The repeal absent broader efforts at comprehensive tax reform is truly troubling.

Repeal of the estate tax would immediately undermine our ability to support the critical wealth-building investments and greater shared prosperity in our state. To improve our economic future, North Carolina must preserve the estate tax.

Bookmark and Share

Comments

comments


Powered by : Big Boom Design : Blog