Another bill worthy of consideration introduced yesterday is HB 101. Sponsored by Reps. Julia Howard (R-Forsyth), Susan Martin (R-Wilson), Tim Moffitt (R-Buncombe), and Mitchell Setzer (R-Catawba), this bill would eliminate North Carolina’s estate tax. The state’s estate tax takes a chunk out of the assets built up throughout a person’s career and often involves a family business. Its bad enough the state and federal government tax our earnings throughout our lives, it is even worse when they tax our justly earned property that we want to pass to our loved ones.
North Carolina’s estate tax is tied to the federal estate tax, which as of 2013 applies to assets above $5 million. There also is a credit against the federal estate tax for any state estate taxes paid. However, this should not deter supporters of HB 101. Given the dire fiscal condition of the federal government and the frequent changes in the federal death tax over the last decade, state lawmakers can have little faith that the federal government won’t change the rules again and subject more people to the death tax and possibly eliminate the credit for state death taxes paid.
The state death tax generates very little revenue, and imposes high compliance costs both on the family members of the recently deceased and the state revenue department.
Civitas looked at the impact of the death tax on some North Carolina farmers last year in this short video. Moreover, a late 2011 Civitas poll found that two-thirds of North Carolina likely voters believe NC should eliminate the death tax.