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Wealth Transfer Taxes: Who pays the estate tax?

The estate tax is highly progressive. The top ten percent of income earners pays virtually all of the tax; over half is paid by the richest 1 in 1,000. Much of the political debate about the estate tax cen-ters around its impact on family farms and small businesses. In fact, very few farms or businesses actually pay the tax.

WWT_Who_pays_06_13_11
Underlying Data: Download

  • TPC estimates that 8,600 individuals dying in 2011 will leave estates large enough to require fil-ing an estate tax return (estates with a gross value under $5 million need not file a return in 2011). After allowing for deductions and credits, an estimated 3,270 estates will owe tax. Roughly 90 percent of these taxable estates will come from the top ten percent of income earn-ers and nearly half will come from the top one percent alone (see table).
  • Estate tax liability will total an estimated $10.6 billion in 2011. The top ten percent of income earners will pay 98 percent of this total. The richest 1 in 1,000 will pay $5.4 billion or 51 percent of the total.
  • Less than 50 small farms and businesses - estates with farm and business assets making up at least half of gross estate and totaling $5 million or less - will pay any estate tax in 2011. Such estates will represent just 1.2 percent of all taxable estate tax returns.
  • TPC estimates that small farms and businesses will pay under $10 million in estate tax in 2011, less than one tenth of 1 percent point of the total revenue the tax will collect.
 
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   Entry 2 of 6