Research Report Back from the Dead: State Estate Taxes After the Fiscal Cliff
Norton Francis
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The 2001 tax cuts temporarily phased out a credit for state estate and inheritance taxes and replaced it in 2005 with a deduction. Responding to the repeal, some states simply repealed their estate taxes. Others decoupled from the federal law, either establishing a stand-alone tax or explicitly linking their taxes to the 2001 law. But most states did nothing, leaving dormant legislation in place linked to the repealed federal credit. The uncertain future of the credit highlights the inter-relationship between federal and state tax systems and the uncertainty federal temporary actions create for taxpayers and other levels of government.
Research Areas Taxes and budgets State and local finance
Tags State and local tax issues Individual taxes Federal budget and economy
Policy Centers Urban-Brookings Tax Policy Center