New York's Estate Tax Reform: Much Ado...About Nothing

TO STOP DRIVING AWAY its elderly citizens, New York State raised its estate tax exemption to $5 million. Previously it was a paltry $1 million. Even Barack Obama went along with a $5 million exemption at the federal level.

The  Empire  State still has a way to go to make itself truly friendly to seniors who need to do serious estate planning, but the move was seen as a sign that its heart is in the right place. The intentions may have been benign, but legislators undid much of the good with a bizarre feature: If an estate is valued at a penny above $5 million, New York's estate tax is imposed from dollar one. In other words, the $5 million exemption goes out the window!

This is idiotic. The issue is extremely important to owners of small businesses, who are prime job creators. Punishing them like this is utterly counterproductive.

Will state legislators fix this? If they don't, then New York will demonstrate that, hype to the contrary, it's still unfriendly to the people who make prosperity possible.

(See Steve Forbes’ new book, Money: How the Destruction of the Dollar Threatens the Global Economy—And What We Can Do About It.)

For more previous blogs see: Steve Forbes