After passing on, people want to be sure that their assets are properly disbursed to family members. However, these assets often face estate tax law, which can cut into the value.
This tax varies from state to state, and has an impact on where wealthy retirees choose to live after leaving the work force for good. According to the Maryland Reporter, legislators have agreed to reduce the state’s high estate tax by returning it to federal standards, which may help keep retirees in Maryland.
“We’re going to phase out the estate tax, and raise it to the federal level,” Senate President Mike Miller told the Maryland Economic Development Association. “I hope we’re going to move forward on the inheritance and estate tax.”
The move to reduce the estate tax would cut Maryland taxes by $14 million this fiscal year, and as much as $87 million in four years. Currently, the estate and inheritance tax accounts for less than 2 percent of all state revenues, as very few estates pay any taxes.
Maryland isn’t the only state to consider cutting its estate tax, as New York Gov. Andrew Cuomo recently proposed $2 billion in tax cuts. According to The New York Times, this includes raising the estate tax exemption from $1 million to $5.25 million. The main goal behind this move is to reduce the number of New Yorkers who leave the Empire State when retiring. Cuomo’s proposal included an array of other cuts, which has garnered support.
“We need to change the environment and the perception of New York as a high-tax state,” Randy Wolken, the president of the Manufacturers Alliance of New York State, told the news source.