The City’s tax plan will meet the federal plan in 2018.
Washington D.C. has followed the trend of some states and reduced their estate taxes. It was done, in part, out of fear that older wealthy people will move to other states that do not have the tax at all, according to Forbes in “District of Columbia Slashes Estate Tax.”
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.
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Read Our Current NewsletterThe 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, but it is unlikely it will change its opinion.
For those who are opposed in general to estate taxes, this is good news. However, it still remains uncertain what will happen with the estate tax at the federal level.
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