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Over time, estate tax applies to more and more
"small" taxpayers. |
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Unified credit is not indexed for inflation; its
value has been diluted by 38% from 1987 to
1996. |
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With indexing, unified credit should have climbed
from $192,800 to $266,000, which would effectively exclude
$800,000. | |
The
Impact of "Bracket creep" |
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Inflation moves taxpayers into a bracket with a
higher marginal rate, even though their economic well-being
remained the same. |
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With indexing from 1987 to 1996, 55% rate bracket
should apply at about $4.1 million rather than $3
million. |
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