Leaping Before We Look?: Repeal of the State Estate Tax Credit and the Consequences for States, Americans, and the Federal Government

Abstract

This paper will explain how certain provisions of the Economic Growth and Tax Relief Reconciliation Act affect the states and, consequently, American citizens. It will particularly examine how the elimination of the federal credit for estate taxes paid to the states will disrupt a neatly functioning system, focusing first on a brief background behind EGTRRA. Next, the paper will explore the history of both the estate tax and the federal credit for state taxes paid, leading into the current state of the law as it stands after EGTRRA. It will then analyze the impact of these changes on states, American citizens, and the federal government. Finally, the future of estate taxes will be contemplated and possible solutions considered.