Trump's tax plans

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No Paul Ryan, the estate tax doesn't hurt small businesses, it hurts the uber wealthy

Ryan wrote in his op-ed that small businesses make up nearly 98 percent of all employers in Wisconsin. The vast majority file federal returns as individuals, at an income tax rate up to 44.6 percent, he wrote. Via estate taxes, he contended, heirs pay taxes a second time on the same assets.

The current federal estate tax threshold is about $5.5 million for an individual and $11 million for a married couple. For 2015 — the last year for which statistics are available — the IRS said 61 estates in Wisconsin got hit with the tax. Is that a lot or a little? Here are some numbers for context. There are approximately 445,000 small businesses in Wisconsin, according to the U.S. Small Business Administration.

It’s not clear how many small business owners die in any given year. But assuming that they succumb at the same rate as Wisconsin’s population as a whole — 874 deaths per 100,000 people, according to the Centers for Disease Control and Prevention — that would translate into a total universe of just under 3,900 deceased small business owners whose estates might be taxed.

Now assume that all 61 estates that actually paid taxes belonged to small business owners. That’s unlikely, because some of the 61 probably accumulated their wealth another way — through stakes or executive positions in major corporations, for example. But even if our assumption were valid, it would mean that only 1.6 percent of small business owners left enough wealth to owe any federal estate tax.

Paul Ryan Says ‘Death Tax’ Hurts Wisconsin Small Businesses. IRS Data Shows Otherwise. - ProPublica