If Amazon CEO Jeff Bezos were to be unexpectedly the today, Washington state could expect an estate tax windfall of nearly $ 12 billion,
that's according to a new Enrico Moretti of the University of California, Berkeley, and Daniel J. Wilson of the Federal Reserve Bank of San Francisco.
On average, they found, state coffers saw a tax revenue windfall of $ 165 million following the death of a Forbes 400 billionaire.
The estate tax is, in practice, a wealth tax at the time of death. Its implementation has long been the subject of debate, with opponents maligning it as a "death tax". Twelve states and the District of Columbia have estate taxes. The states are: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington.
"Billionaires tend to leave states with an estate tax, especially as they get old, the study's author wrote. "
" Given the rise of wealth owned by those at
Critics of estate taxes argue that they can strategically move between states to mitigate their tax obligations, municipalities Opponents claim that states could theoretically loose a significant sum in income taxes tate duties.
But Wilson and Moretti said: "The majority of states suffer from the loss of income. "
For the average state, the additional income from the estate tax exceeds 31%, the researchers found. A select few states with abnormally high personal income tax rates, such as California, would lose net revenues as the cost of losing a lifetime's worth of taxable income.
"While the cost-benefit
Florida and Texas
They said that they would be willing to pay taxes income tax revenue include Florida and Texas. Those two states, which do not currently have estate taxes, would increase by $ 7.67 billion and $ 7.06 billion, respectively, in present value of revenues, Wilson and Moretti estimate.
In Arkansas, which removed its estate tax 16% estate tax, Moretti and Wilson found.
The death of Walmart's co-founder James Walton Arkansas' estate tax revenue is 425% to $ 183.2 million, the researchers said. The recent death of David Koch is estimated to be about $ 4.17 billion in tax revenue for New York state, where he lived, according to the study.
How to Tax the Wealthiest Individuals in the U.S. President of the United States has called Democrats hoping to challenge President Donald Trump in the 2020 elections.
Sen. Elizabeth Warren, now considered a front-runner in the primary race, is advocating for an annual tax of 2% on fortunes above $ 50 million as part of the Ultra-Millionaire Tax. Sen. Bernie Sanders proposed an annual tax of 1% on fortunes valued at $ 32 million to $ 50 million and 8% duty on estates worth over $ 10 billion.
Democratic presidential candidates Sen. Bernie Sanders (I-VT) and Sen. Elizabeth Warren (D-MA) speaks at the beginning of the Democratic Presidential Debate at the Fox Theater July 30, 2019 in Detroit, Michigan.
Justin Sullivan | Getty Images
For years, there's little incentive for billionaires to change their home state. The U.S.
But President George W. Bush's tax cuts have been phased out of the credit and made a billionaire's future tax liability much more dependent on one's state of residence. Moretti and Wilson found
The two so far are more likely than younger ones to move or have moved to states without estate taxes. Moretti and Wilson estimate that from 2001 to 2017, a 40-year-old billionaire on the Forbes list has a 22% chance of living in a state with an estate tax. By age 70, the odds were only 14%.
"By year 2010-namely 9 years after the reform-21.4% of those who were originally taxed in a non-estate tax state taxed state estate, "Wilson and Moretti wrote.
To be sure, the researchers added, this study only accounts for the loss of state of billionaires' incomes. Relocation of firms and investments, as well as a reduction of donations to local charities.