A $30 million estate tax exclusion could cost an American a total of $3,100 a year in taxes, according to a new study by the Tax Foundation.
The Tax Foundation estimated that such an exclusion would be a $40,000 subsidy to a middle-class family.
The study estimates that the $30 billion estate tax subsidy would amount to a $25,000 tax cut for every American.
The tax deduction would be enough to provide a family $2,700 a year on its annual $10,000 annual income.
The subsidy would also mean that a family would save $2 million a year, according the Tax Policy Center.
The Tax Foundation’s analysis estimates that roughly $25 million would be saved annually by removing the estate and personal property taxes, and $4 million by eliminating the alternative minimum tax.
The estimated savings would total $31.6 billion a year.
The Tax Policy Institute, a Washington-based think tank that studies federal tax policy, said the estate exemption is a significant subsidy to the middle class and would boost the U.S. economy.
The tax exclusion, which was first enacted in 1913, allows a married couple to deduct up to $5 million of property taxes on their joint income.
It’s the only income tax deduction that does not apply to wages or salaries.