I testified in Hartford about the need to repeal Connecticut’s state gift tax. It doesn’t raise a lot of money and discourages high net worth people from moving to Connecticut and encourages those in CT to relocate. Until this month we at least had one other state, Minnesota, that also had a gift tax, but as Ashlea Ebeling reports for Forbes Minnesota has repealed its statute.
She quotes me as saying the tax is an abomination and it is. What is the point of a tax that costs a state more money than it raises. The gift tax’s greatest impact is on very large estates so by being the only state in the union with such a tax we are discouraging the very families that would pay much more in income and other taxes, start businesses, give to charities and keep the gold in the Gold Coast from moving to Connecticut.
Connecticut is also on of the few states in the US with an estate tax, but as you can see from Ashlea’s article analyzing the state estate tax laws every state in New England and the Mid-Atlantic states also have a death tax so the CT estate tax is less of a factor in home buying. In fact for the moment, moving to CT from NY will save you estate taxes. Greenwich’s high end is definitely doing better in 2014 than 2013, but we still have a ways to go.
Now is an even better time to write you state legislator and ask him or her to repeal the last remaining gift tax in the nation.