Final bill raises threshold for estate tax rather than eliminating it

As a presidential candidate, Donald Trump set his sights on eliminating the estate tax. "No family will have to pay the death tax," his campaign's tax proposal said.

On Dec. 19 and 20, the Senate and the House passed a final version of the tax bill, which will go to the president for his signature. Let's take a look at how the final bill treated the estate tax.

The estate tax comes into play when someone dies and the estate is large enough to qualify for the tax. Under existing law, it essentially affects only individuals and families with significant assets.

In 2017, estates worth less than $5.49 million are exempt from the tax, according to the Urban Institute-Brookings Institution Tax Policy Center. Above $5.49 million, the estate is generally taxed at 40 percent. Family-owned farms and closely-held businesses may be able to pay less or pay in low-interest installments.

For 2017, the Tax Policy Center said that "after allowing for deductions and credits, 5,460 estates will owe tax," the center concluded.

The initial tax bill that passed the House did eliminate the estate tax, but the Senate's bill did not, instead raising the dollar amount that is exempt from the tax.

The final version of the tax bill kept the estate tax in place but increased the amount to be shielded from the tax. Under the new provision, the tax will affect estates of at least $11.2 million, or $22.4 million for couples. The provision is poised to sunset after 2025.

The increased exemption level means that fewer estates than ever will be hit by the tax, which is progress toward "no family" having to pay the estate tax. But it's not all the way there. We rate this promise a Compromise.