Just the numbers on tax, please.

OK, a question about the estate tax… I hope this can stay in GQ by just sticking to numbers and sources please since it could easily find its way to GD.

I’ve heard that only 2% of the U.S. population pays the estate tax and only 4% of the people who have to pay the tax are small businessmen or farms. The source was an interview on NPR’s Morning Edition, but no source was given for the info (grrrrrrr…) so I’m hoping the Dopers can figure out where these numbers come from and if they’re reliable. Thanks!

I listened to the same broadcast. I would look it up for you, but I’m headed out the door. http://www.npr.org will have the archives for the show you are talking about. I’ve found NPR programming to be ultra-reliable, albeit sometimes with a liberal bent. All-in-all, I think it’s the best news organization out there. But I digress; not wanting to turn this into an IMHO.

The 2% number is easy to find a cite for. The IRS provides the source data here. Unfortunately the format is a zipped Excel file, which is not nice to link to. But the same data is contained in [a hefty report](http://www.house.gov/jct/x-29-99.htm#A. Background Data) from the U.S. House’s Joint Committee on Taxation. The exact number for 1997 (the most recent year listed) was 1.79% of adult deaths.

For the farm number, the best I could do was this Excel file from the IRS, which breaks down estate tax returns by type (for 1998). There were a total of 47,483 returns file that had a taxable amount. 2897 of them included farm assets. That’s around 6%, but I’m sure you can finesse that to be 4% if you want it to be lower to justify your argument.

Or they might have just been using the numbers given in a report titled ESTATE TAX REPEAL: A Costly Windfall for the Wealthiest Americans, from the Center on Budget and Policy Priorities. They give the 4 percent number for farms.

Thanks, sethdallob and SmackFu. As you expected, I wasn’t able to get to the IRS Excel files, but the reports you linked to were very helpeful!

It’s a statistic that you need to be careful how you use. Generally speaking, it is very easy to get around the estate tax with a tiny bit of planning. Hence, if you know your estate will hit the magic trigger point, you set up trusts and so forth and so avoid the estate tax.

Thus, there are a only a very small number of deaths that actually result in estate tax – generally, people who thought their estate was below the trigger point, or people who were too stupid to do any planning, and perhaps a few similar categories.

If you want to use that statistic to say that the estate tax does not (therefore) produce much revenue for the government, you’d need to have some figures on amount of tax revenue generated. If you want to use that statistic to say that the estate does not affect a large number of people, you’d be distorting the picture – lots and lots of people go to great lengths to avoid having to pay the estate tax.