Reply #132: Collateral damage [View All]

[ElaineinIN]

One of the most damaging aspects to the most recent revision to the estate tax was the repeal of the state death tax credit. I won't bore all of you with the details, but in effect what it did was repeal the state estate tax for most states, because the state estate tax was usually a function of the federal state death tax credit. Now, one might argue that the amount of revenue raised by the federal tax is a drop in the buck (however, I will tell you that right around the beginning of the Iraq war, I was at a presentation with an IRS E&G attorney who indicated the revenue for the past year was almost exactly the same as the amount requested by the shrublet for the first war appropriation... $78b I want to say...) however, the effect on the state revenue base has been absolutely devestating. Here in Indiana, they cannot repeal the inheritance tax, because it is the primary funding mechanism for county governance. So I respectfully disagree with the idea that this isn't an economic battle, as well as a class and values battle.