President Donald Trump's tax plan, introduced during the campaign and outlined in more detail last week, calls for getting rid of the federal estate tax. That would be a "terrible mistake," billionaire Warren Buffett told CNBC on Tuesday.
The estate tax — a tax on cash, real estate, stock or other assets transferred from one generation to the next — was first introduced in 1916, when it charged 10 percent on estates valued at $5 million or more. At its peak, it levied a tax of 77 percent on estates worth $10 million or more.
Under current rules, any individual's estate that exceeds $5.49 million in value, or a married couple's estate that exceeds $10.98 million, is taxed up to 40 percent upon the owner's death.
Since the threshold is so high, the very richest Americans are alone in paying the tax.