Wednesday, April 9, 2014
Wealthy New Yorkers Face 164% Estate Tax Rate
CNBC, New York Rich Face Tax Surprise When They Die:
If you're a New York multimillionaire, you now have another incentive to stay alive.
A change this month in New York's estate tax, which was billed as tax relief for the wealthy, contains a hidden wrinkle that could leave some multimillionaires with a much bigger surprise tax upon their death. Certain estates could even wind up with a tax rate of 164 percent on portions of their estates, according to one tax expert.
https://taxprof.typepad.com/taxprof_blog/2014/04/wealthy-new-yorkers.html
Comments
Russ Willis, that is how i read it, too: on a sliver of income about 2 million the marginal rate is over 100%. At any rate (no pun intended), it doesn't give you much confidence in the effectiveness of the State of New York's efforts to avoid emigration by the wealthy.
Posted by: Bud Norton | Apr 10, 2014 10:28:20 AM
Mayor de Blasio commented on the 164% tax rate that while a good start, he would not rest until these fat-cat bajillionnaires finally pay their fair share of the tax burden.
Posted by: TomJB | Apr 10, 2014 9:16:28 AM
Thanks for the information. It's a relevant article for my parents whose estate could be affected.
It seems strange that an estate that is slightly below the exclusion limit will end up being slightly larger, post tax, than an estate that, pre-tax, is slightly above the exclusion limit. But NY was always sort of strange.
Posted by: TMLutas | Apr 10, 2014 5:13:51 AM
the linked article makes somewhat clearer (though still incoherent) that what we are talking about is the tax on an estate slightly over the exemption threshold, expressed as a percentage of the amount over the threshold. there is a "cliff" here created by the fact the credit is phased out very quickly. the 164 pct. thing is just a talking point.
Posted by: russ willis | Apr 9, 2014 1:14:00 PM
expressed as a percentage of the amount over the threshold. there is a "cliff" here created by the fact the credit is phased out very quickly. the 164 pct. thing is just a talking point.
That sounds like more than a talking point. If by exceeding the exemption level they own more in taxes than they are above the exemption the state is basically declaring the exemption "enough" and if you have the temerity to have more than enough they'll take that more and then some to make sure people quit having more than enough.
If the goal of the policy is to lessen "wealthy flight" I think it's designed wrong.
Posted by: Herb | Apr 10, 2014 12:47:57 PM