The estate tax, or ‘death tax,’ as some call it, is money that the government collects through the transfer of a “taxable estate” of an individual who dies. The current maximum federal estate tax rate is 35%, though estates valued at $5.12 million or less are exempt.
In addition to the federal estate tax, a handful of states have their own.
President Obama has said that he’d like to raise the top rate to 55% — where it was prior to the 2001 Bush tax cuts — and reduce the exemption threshold to $1 million. That will happen starting in January unless Congress intervenes before then.
Campaigning in Iowa today, GOP presidential nominee Mitt Romney said that as president he would repeal the tax completely. Doing so, he argued, would benefit rural farmers with as little as 150 acres of land.
“We ought to kill the death tax,” he said. “You paid for that farm once, you ought not pay for it again.”
Romney’s critics, however, say the plan to scrap the estate tax would directly benefit the millionaire candidate and his family.