MINNEAPOLIS (WCCO) — House and Senate Republicans in Washington have high hopes this Thanksgiving holiday.
They hope to pass a controversial tax bill before the end of the year, making it the first major piece of legislation since President Donald Trump’s election.
One part of that massive bill raising eyebrows: the president’s claim that millions will benefit if Congress repeals the estate tax. But is that true?
Prince certainly meant it when he sang “Money Don’t Matter 2 Night,” but when the iconic Minnesota artist died last year, it mattered a lot to his heirs.
They paid a significant amount of money in estate taxes.
Repealing the federal estate tax — or the “death tax” as critics call it — is a top priority for Republicans and Trump.
“To protect millions of small businesses and the American farmer, we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax,” Trump said.
But that number is just not true.
Very, very few estates are affected, and only the wealthiest.
The non-partisan Tax Policy Center estimates in 2017 that 5,460 families will pay a federal estate tax. That is one-tenth of one per cent of all of the taxpayers in the country.
In Minnesota, that number is even smaller.
Here’s what you need to know: Minnesota is one of only 18 states to impose its own estate tax, on top of federal tax.
But most farms and businesses do not pay any estate tax because they are not worth enough.
Minnesota exempts estates that are valued at less than $2.1 million.
Of the 40,000 deaths this year in Minnesota, about 60 families will pay a federal estate tax averaging about $2 million.
Only a few are farms. Nevertheless, it can certainly sting.
Prince died without a will, leaving an estate worth up to $300 million.
Combining federal and state taxes, the Prince heirs face a tax bill of $163 million — including $26 million to Minnesota.