Scary death tax
There was a Kiplinger’s report about the 10 states with the scariest death taxes. Minnesota was listed as No. 3 at 5.6 percent tax in for estates of $1 million. Sounds like a lot of dollars but it includes everything you own; your house, vehicles, household goods, boats, retirement funds, insurances, etc. Minnesota even looks back for individuals to pay taxes on gifts made within three years prior to death.
Now this seven figure number is very big, but over a person’s life is it big? Many of our seniors are in their 80s and 90s or reached the century mark as longevity has increased. How much has inflation increased a loaf of bread over their lifetime? Has it increased 10 or 20 times and now a dollar only purchases a slice of bread. So the seven figures have stayed the same but purchase power is way down. All the factors that make up an estate subject to taxation have inflated increases over a person’s life time.
So one must ask the legislators and governor if they understand inflation and the difference between a dollar over a person’s life time and what it can purchase. And has the definition of a millionaire changed from dollars in hand to dollars in material items and an individual’s home. Government say there is one exemption of estate taxes as it doubles the estate value for couples, but at time of death there is only one person even if it is just minutes between a couple’s death. And all those future retirees that need a million or more, since the old pension is gone, get ready to pay the high death tax. Seems like the goal is to keep Minnesota at the top of list as most high tax state.