US Land Tax Revenue Halved in 2 Years... Impact of Trump Administration's Tax Law Revisions

Trends in U.S. Federal Government Land Tax Revenue [Image source= Bloomberg]

[Asia Economy Reporter Park Byung-hee] Bloomberg News reported on the 18th (local time) that due to the tax law revision during President Donald Trump's administration in 2017, the United States' estate tax revenue has been cut in half over the past two years.

According to the U.S. Internal Revenue Service, the federal government's estate tax revenue for the 2020 fiscal year (October 2019 to September 2020) was $9.3 billion, less than half compared to over $20 billion in 2018. The number of households paying estate tax also sharply dropped from about 5,500 to 1,275.

This is due to the tax law revision enacted by the Republican Party in 2017 during the Trump administration. At that time, the tax law revision doubled the exemption limit for tax-free gifts from parents to children to $23.4 million.

Even if the estate exceeds $23.4 million, various methods can be used to avoid taxes. Phil Knight, the founder of Nike who owns about $60 billion in assets, was confirmed to have gifted approximately $9.3 billion to his children without paying a single cent in taxes since 2009, sparking controversy.

Richard Greenberg, an attorney at the New Jersey-based law firm Greenberg & Schulman, said, "Minimizing estate tax is easy," adding, "By combining various means during the process of settling the doubled gift exemption and inheritance tax, a large amount of real estate assets can be passed on to children."

The federal government's tax revenue exceeded $4 trillion in the last fiscal year. Even if estate tax revenue is cut by more than half, it amounts to about $10 billion, so it is not very noticeable.

However, since the Joe Biden administration aims to reduce income inequality and collect more taxes from the wealthy, controversy over the sharp decline in estate tax revenue seems inevitable in the future. This is especially true given that estate tax revenue, which is a tax on the wealthy, has decreased amid worsening income inequality. According to the Bloomberg Billionaires Index, the total wealth of U.S. billionaires has doubled over the past five years, exceeding $5 trillion.

However, even within the Democratic Party, there are disagreements over bills to increase tax burdens ahead of the midterm elections. Recently, the Democratic Party prepared a bill to halve the exemption and block many means by which the wealthy avoid taxes, but this item was ultimately removed from President Biden's 'Build Back Better' bill due to strong opposition from moderate Democrats within the party.

This content was produced with the assistance of AI translation services.