Optimist Economy The Tax We’re 99.93% Sure That You Will Never Pay
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Jul 8, 2025 The estate tax only impacts the wealthiest 0.07%, yet nearly half of Americans fret over it. Reflecting on its history, the discussion reveals how loopholes have diminished its power to address wealth inequality. The potential benefits of a higher estate tax could include funding children's trust funds and reducing the concentration of wealth. Plus, the hosts weave in humorous takes on lawn equipment preferences while celebrating community support, blending insightful economics with light-hearted banter.
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Estate Tax Basics & Exemptions
- The estate tax applies to wealth passed down at death above a high exemption threshold.
- Currently, very few estates pay this tax due to large exemptions and spousal exemptions.
Estate Tax Hits Fewest Estates Ever
- Only 0.07% of estates currently pay the estate tax, a drastic decline from 2.1% in 2001.
- Large exemption increases and rate cuts over the last 25 years made the tax nearly irrelevant.
Estate Tax's Historic War & Inequality Roots
- The estate tax has roots in 18th and 19th century war revenue needs.
- It emerged permanently in 1916 to reduce wealth concentration from the Gilded Age oligarchs.