In a controversial move, the government of Washington D.C. has decided to continue its previous plans to reduce its estate tax.
State governments have recently followed a trend of reducing their estate taxes, in part out of fear that older wealthy people will move to other states that do not have the tax at all.
While not a state, the District of Columbia made plans to do the same thing in 2014. However, it was concerned about meeting budgets, so it set revenue goals that, if met, would automatically cause an increase in the estate tax exemption.
As a result, in 2017, the exemption has gone up to $2 million and it will rise to meet the federal estate tax exemption of $5.49 million in 2018.
Forbes reported this development in "District of Columbia Slashes Estate Tax."
The issue is not without local controversy, since some people believe the revenue goals are not being met. However, the City Council recently rejected an amendment that would have kept the estate tax exemption at its current rate.
The council will have to vote again on the issue, because that it is how it does things. However, it is unlikely that it will change its opinion.
For those who are opposed to estate taxes in general, this is good news. However, it still remains uncertain what will happen with the estate tax at the federal level.
The trend to reduce the estate tax burden generally continues for now.
For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (May 31, 2017) "District of Columbia Slashes Estate Tax."