You have to earn a lot to be subject to the estate tax. For 2016, the estate exemption is $5.45 million per individual. That means you could leave your heirs up to $5.45 million and pay no federal estate taxes if you died this year.
Only about 10,800 individuals who died last year left estates large enough to require filing an estate tax return, according to estimates by the Urban-Brookings Tax Policy Center. After allowing for deductions and credits, that number drops to less than 5,400.
Small farms and businesses paid an estimated $10 million in estate tax in 2015, less than one-tenth of 1 percentage point of the total estate-tax revenue, the Tax Policy Center found. Nearly 85 percent of these taxable estates came from the top 10 percent of income earners and more than 40 percent will come from the top 1 percent alone, the Tax Policy Center found.
Because so few households are affected by the estate tax, it is not a big revenue generator for the federal government. The federal government collects about $25 billion annually from the estate tax compared to the $2 trillion it collects in income taxes each fiscal year.
Ending the estate tax could hurt charitable giving from wealthy people looking to keep the net worth of their estates below the tax's threshold, Williams said.
Meanwhile, Clinton has proposed increasing the top estate tax rate to 45 percent and lowering the estate tax exclusion to $3.5 million. That change would restore the federal estate tax to 2009 levels.
Increasing the estate tax would raise an additional $106 billion over the next decade, according to an analysis by the Tax Foundation.