Senate and House Republicans have introduced legislation to repeal the estate or death tax, a revenue measure that has done little to ease state fiscal woes.
House Bill 149 mirrors a suggestion proposed earlier this month by a bipartisan committee named by Gov. Jack Markell to recommend ways to look at revenue streams.
No Democrats signed up as co-sponsors of the legislation.
The tax is imposed on property at the time of a person’s passing and applies to estates with a total value of more than $5.43 million.
“The Estate Tax is volatile, unresponsive to the economy, and puts Delaware at a competitive disadvantage,” the report stated.
Persons with large estates often avoid the tax, often by residing in states without the tax, such as Florida. Florida also lacks an income tax, a major factor in affluent retirees relocating to the state.
Delaware had previously eliminated the tax, but brought it back in 2009 as part of a package aimed at dealing with a budget shortfall. The tax was to have expired in 2013. However, the tax was retained as budgets remained tight.
State Rep. Mike Ramone, R-Pike Creek South, said “the state has lost much more revenue in income tax collections than we have gained from the estate tax,” he said.
The tax accounted for only $1.3 million in Fiscal Year 2014, or just 0.04 percent of overall state revenue.
If enacted, the measure would eliminate the Estate Tax at the start of the new fiscal year on July 1st.
The bill is currently pending action in the House Revenue & Finance Committee.
The bill is a no-lose proposition for Republicans, who have limited leverage in the General Assembly. Also, the amount of revenue is modest and the measure appeals to the Republican base.
