Introduced
by
To eliminate the link between the Michigan estate tax and the federal estate tax, which would establish a permanent eight-percent Michigan estate tax on estates of $2 million or more. Under previous federal law, heirs could subtract from their federal estate-tax bill the amount paid in state death taxes, up to 16-percent of the estate's taxable value. Therefore, Michigan set its estate tax rate at that 16-percent level. However, this federal credit is phased out by 2005 under the Bush tax cut passed in 2001. Since the Michigan law established the state rate at whatever the maximum federal credit is, when the federal credit disappears, so does the Michigan estate tax.
Referred to the Committee on Tax Policy
