Houston Estate Planning Law Blog
HOW IS TURMOIL IN DC AFFECTING THE ESTATE TAX IN TEXAS?
Since the recession, and probably sometime before it became more than just a few-year-slump, Texas legislators have been considering the very real possibility that the federal government may not be able to give them the necessary funds in order to balance their hefty budget.
So far, funds provided by the federal government account for more than a third of the state’s budget; but what if that money dried up? How would Texas legislators be able to subsidize an approximated $64.7 billion loss?
According to a bill introduced this month by Rep. James White, R-Hillister, the answer may be to bring back the state’s estate tax. Although calculations suggest that by re-instating the tax, the state would collect between $62 million and $317 million over the course of 2013, an increase in estate taxes could mean a significant decrease in the amount of money some people intend for their beneficiaries.
Though many Texans agree that weaning themselves off of federal funding could save them a large headache if there is another financial crisis from Washington D.C. in the future, they also point out that in the majority of cases that would be affected by the tax hike, the estates being given to beneficiaries would be going to people may be suffering financially. The additional money that would be spared because of an absent estate tax could mean a bigger difference than it would to the state government.
Although other state legislators are praising Rep. James White, R-Hillister for his efforts to protect Texas financially in the event of Federal financial turmoil, some people in the community urge representatives to reconsider the impact this will have on people and their beneficiaries.
Source: The Dallas Morning News, “Rep. James White files ‘Texas Self-Sufficiency’ bill to analyze reliance on federal funds,” Claire Cardona, Jan. 22, 2013
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