Repeal of the Federal Estate Tax- Context

In a report published by the Center on Budget and Policy Priorities on May 5, 2017, the following facts were of note:

1. Only 0.2 per cent of estates are federally taxable;
2. While the top federal estate tax rate is 40%, the average effective estate tax rate is about 17 per cent, after taking into account the $5.45 million transfer tax exemption and common estate planning techniques that use valuation discounts;
3. The federal estate tax is estimated to generate less than one per cent of the federal revenues over the next decade; and
4. If the federal estate tax is repealed (and not replaced with an alternate tax like a deemed capital gain on death) the loss of revenue to the federal government over the next decade would be roughly $269 billion.