Fairfield County Dems join GOP in push to repeal estate tax
By Emilie Munson
HARTFORD — Connecticut’s estate tax brings in millions in revenue for the state from wealthy individuals each year.
But a growing group of lawmakers are now asking whether the tax is actually hurting state coffers by driving the rich and elderly out.
Moderate Democrats from Fairfield County — where many of the state’s wealthiest residents live — have joined Republicans’ calls to repeal the levy.
Repeal is not supported by Gov. Ned Lamont, said his spokesman Maribel La Luz Wednesday.
Lamont, a wealthy Greenwich entrepreneur and great-grandson of a former J.P. Morgan chair, proposed repealing the gift tax —a three-year look back on gifts of more than $2.6 million — in his state budget, but didn’t change estate tax rates or exemption levels. He avoided the estate tax during the campaign, until right before Election Day, when he called it’s elimination a “giveaway to the very wealthiest.”
In contrast, Democrats Sen. Alex Bergstein, of Greenwich; Sen. Will Haskell, of Westport, and Rep. Steve Meskers, of Greenwich, have all sponsored legislation to repeal or phase out the estate tax.
“We are losing more money than we are gaining with this tax,” Bergstein testified Wednesday before the Finance, Revenue and Bonding Committee, which is considering numerous bills to nix the tax.
Connecticut is one of only 17 states with an estate or inheritance tax, according to the independent think-tank Tax Foundation.
In 2018, the Connecticut estate and gift taxes brought in only $223 million, or about 1 percent of the state budget, the state’s Open Budget database shows.
When wealthy individuals choose to move out of Connecticut to avoid the estate tax, they deprive the state of other revenue in the forms of income and sales taxes, which are the big drivers of the state budget, these Democrats argue.
The well-heeled don’t have to flee to Florida to avoid the estate tax. Greenwich residents with estates of $4 million could move five miles to Westchester County, where New York’s estate tax would not apply to them, pointed out Rep. Holly Cheeseman, R-Niantic.
The Tax Foundation, Connecticut Business Industry Association, National Federation of Independent Business and Connecticut Realtors supported repealing the tax Wednesday. Repeal was also a suggestion to lawmakers from the high-profile commission of CEOs in 2018.
Progressive Democrats, like Rep. Josh Elliott, D-Hamden, decry an estate tax repeal. Why should Connecticut reduce taxes on the wealthy who can afford to pay, they argue.
“Broadening regressive sales taxes, while eliminating the estate and gift taxes, shifts tax burdens away from those who are best able to meet them,” agreed Sal Luciano, president of the AFL-CIO, Wednesday. “Countless studies show that this kind of trickle-down tax policy actually slows economic growth because working and middle class workers spend a larger percentage of their income, thereby generating local economic activity.
Connecticut’s Probate Court Administrator Paul Knierim said Wednesday eliminating the estate tax will cause probate fee revenue to fall by $17 million annually. In addition to handling cases on wills and trusts, probate courts oversee some guardianship cases and care for some people with disabilities.
Currently, people who die in possession of an estate worth more than $3.6 million in Connecticut have that estate taxed at a progressive rate between 7.2 and 12 percent.
In the coming years, only larger and larger estates will be taxed. In 2020, only estates greater than $5.1 million will be taxed. By 2023, Connecticut’s estate tax will match the federal limit, which is now $11.4 million.
Maine, Massachusetts, Vermont, Rhode Island, New York, Washington, Oregon, Minnesota and Illinois also have estate taxes.
Clarification: this story has been updated to reflect that eliminating the estate tax will decrease probate court revenue, but the court did not take a policy stance.
firstname.lastname@example.org; Twitter: @emiliemunson
Read original story here: https://www.ctpost.com/politics/article/Fairfield-County-Dems-join-GOP-in-push-to-repeal-13757673.php