Amid political discourse in India surrounding wealth redistribution which is part of the Congress’s election manifesto for the ongoing Lok Sabha polls, a statement made by Indian Overseas Congress chairman Sam Pitroda has sparked a debate regarding the inheritance tax system in the United States. Pitroda advocated for an inheritance tax similar to that of the US, claiming that the American government imposes a hefty 55% tax on a person’s wealth upon their demise, leaving only 45% for their heirs.
#WATCH | Chicago, US: Chairman of Indian Overseas Congress, Sam Pitroda says, "…In America, there is an inheritance tax. If one has $100 million worth of wealth and when he dies he can only transfer probably 45% to his children, 55% is grabbed by the government. That's an… pic.twitter.com/DTJrseebFk
— ANI (@ANI) April 24, 2024
However, a closer examination reveals a more nuanced reality. Contrary to Pitroda’s assertion, the United States does not have a uniform federal inheritance tax. Instead, inheritance tax policies vary significantly across states. As of the latest data available, only six out of the fifty states in the US levy an inheritance tax. These states include Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
Moreover, the rates imposed by these states differ substantially from the 55% figure mentioned by Pitroda. For instance, Iowa imposes a 6% inheritance tax, while Kentucky and New Jersey have rates of 16%. Maryland and Pennsylvania levy taxes at 10% and 15%, respectively. Nebraska stands at 15% as well. It’s important to note that these rates are subject to exemptions and thresholds, which means that only a fraction of taxpayers actually encounter the inheritance tax.
Furthermore, there have been recent legislative developments in some states regarding inheritance taxes. For example, Iowa has initiated steps to phase out its inheritance tax, aiming to completely eliminate it by the next year. Such changes indicate a dynamic landscape of inheritance tax policies within the United States.
So we’re following America now? Good. They also don’t have personal religion-based law boards. Speaking of inheritance tax, there’s none at the federal level, only at state level. Even then, only six out of 50 states have it. Their highest slabs being as follows:
Iowa, 6%… https://t.co/qlLKhucr17
— Amit Schandillia (@Schandillia) April 24, 2024
Additionally, it’s crucial to distinguish between inheritance tax and estate tax, as both terms are often used interchangeably but entail different mechanisms. While inheritance tax is imposed on the assets received by individual beneficiaries, estate tax is levied on the deceased person’s estate before distribution. As of now, only thirteen states impose an estate tax, with rates reaching up to 40%.
In light of these complexities, Pitroda’s assertion regarding the uniformity and magnitude of inheritance taxes in the US appears to be inaccurate. The reality is that inheritance tax policies vary widely across states, with rates and exemptions subject to legislative changes and state-specific regulations.
It is important to note that Rahul Gandhi spoke about wealth distribution among the population and not necessarily inheritance tax or future policies as claimed by Pitroda in his interview with ANI. Rahul Gandhi in his speech that when the Congress came to power, an economic survey will be conducted. He also said, “My target is that I will distribute the amount of money that Narendra Modi gives to Adani to the poor. I am counting. If he gives one rupee to Adani, I will give one rupee to the poor. I will give as much money to the poor as you give them (rich) – be it farmers, labourers, kirana shop owners, unemployed youth. And I will show you that real politics does not happen by helping billionaires, real politics happens when you help farmers, labourers, small traders/businessmen, unemployed youth. I will show you that.”
Think he hadcclarified that he would distribute each rupee given away to cronies by current incumbent amongst SC, ST, Unemployed youth etc. Somebody had posted this video on X few days ago, which I could not verify. So please view with caution pic.twitter.com/85CqgoqaVm
— Raghuvir (@RPrabhu2022) April 24, 2024
The Congress has come up with a very vile and malicious plan that only seems to be set on destroying the country inside out.
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