Who pays the estate tax?
The top 10 percent of income earners pays virtually all of the tax, with over one-third paid by the richest 0.1 percent (table 1). Very few farms or family businesses pay the tax.
The Tax Policy Center estimates that some 10,800 individuals dying in 2015 will leave estates large enough to require filing an estate tax return (estates with a gross value under $5.43 million need not file this return in 2015). After allowing for deductions and credits, 5,330 estates will owe tax. Nearly 85 percent of these taxable estates will come from the top 10 percent of income earners and over 40 percent will come from the top 1 percent alone.
Estate tax liability will total an estimated $18.4 billion in 2015. The top 10 percent of income earners will pay 97 percent of this total. The richest 0.1 percent will pay $6.4 billion, or 35 percent of the total.
Only 30 small farms and closely held businesses—estates with farm and business assets totaling no more than $5 million and making up at least half of gross estate—will pay any estate tax in 2015. Such estates will represent less than 1 percent of all taxable estate tax returns.
The Tax Policy Center estimates that small farms and businesses will pay only $10 million in estate tax in 2015, less than one-tenth of 1 percentage of the total estate tax revenue.
Urban-Brookings Tax Policy Center. “Microsimulation Model, version 0515-1.”
Harris, Benjamin. 2013. “The Estate Tax After ATRA.” Tax Notes. February 25.
Joint Committee on Taxation. 2015. “History, Present Law and Analysis of the Federal Wealth Transfer System.” JCX-52-15. Washington, DC: Joint Committee on Taxation.
Williams, Roberton. 2013. “Finally, a Permanent Estate Tax, Though Just for the Wealthy Few.” TaxVox (blog). February 7.