The estate tax runs through twelve rate brackets. Every dollar it collected in 2023 came out of the twelfth.

The last line of the estate tax rate schedule reads: over $1,000,000, tax of $345,800 plus 40 percent of the excess. Eleven lines sit above it, running from 18 percent up through 39, and they are printed in section 2001(c) exactly as they have been since 2013.

Nobody reaches them.

In the returns the Internal Revenue Service processed during 2023, the tentative tax computed across all twelve brackets came to $66,805,889,000. Charge every taxable estate the top-bracket formula instead, ignoring the eleven brackets beneath it, and the total comes to $66,805,877,000. The gap between the graduated schedule and a flat 40 percent tax is $11,800 on $66.8bn, which is a rounding artefact rather than a difference. The lower brackets exist, they are computed, and then the unified credit cancels every one of them.

That is what a century of exemption increases eventually does to a rate schedule, and it is the clearest way to see what the exemption history below actually means. The number that governs this tax is not the rate. It is the exclusion, and the exclusion has spent most of its life being set once and then left alone.

What has the federal estate tax exemption been, year by year, since 1916?

The federal estate tax exemption began at $50,000 in 1916 and stands at $15,000,000 for deaths in 2026. In constant 2025 dollars the 1916 figure is worth about $1.48m, so the real exclusion is roughly ten times what it was at the start. The path between the two points is not a climb. It is a series of long plateaus.

Amounts for 1916 through 2007 are the IRS Statistics of Income Division's own compilation, Figure D of The Estate Tax: Ninety Years and Counting. Amounts from 2011 are the basic exclusion amount table the IRS maintains for Form 706. The constant-dollar column is our calculation from Bureau of Labor Statistics CPI-U annual averages, expressed in 2025 dollars. The full per-year series is available as a CSV.

One definitional note before the table. From 1977 onward there is no exemption in the statute. There is a unified credit, and the figure shown is the exemption equivalent of that credit, which is the amount of taxable transfers the credit will cover. SOI's own footnote to Figure D says as much. The distinction matters for the arithmetic further down and for nothing else.

The 2026 row carries no constant-dollar figure because the 2026 annual average price index does not exist yet. Two further rows need a caution attached. The 1940 exemption was unchanged in form, but a 10 percent surtax was layered on top of the schedule, which SOI records in its own footnote. And 2010 is not really a year at all. Under section 301(c) of Public Law 111-312, an executor of an estate of a decedent dying in 2010 could elect out of the estate tax entirely and take a modified carryover basis instead of the step-up. The $5,000,000 and 35 percent shown for that year is the regime for estates that did not elect.

Why did the exemption stay at $60,000 for thirty-five years?

Because nothing required it to move, and until 2011 no part of the estate tax was indexed to prices. The $60,000 exemption was set for 1942 and was still $60,000 for 1976. Over those thirty-five years the consumer price index rose by a factor of 3.49, so the exclusion that had been worth $1,185,066 in 2025 dollars was worth $339,483 by the end. That is a real cut of 71.4 percent, and not one vote was taken on it.

What happened next is the part the nominal column hides. SOI's Figure F tracks taxable estate tax returns as a share of adult deaths from 1916 onward, and for most of that century the share sat below 2 percent. It peaked at close to 8 percent in 1976, when, in SOI's own words, more than 139,000 taxable returns were filed. The federal estate tax reached its widest point in American history not because Congress broadened it but because Congress had stopped touching it while prices tripled.

The Tax Reform Act of 1976 doubled the effective exemption and converted it into a unified credit. Every increase since has been, in part, a repair.

Three later freezes did the same thing on a smaller scale. From 1916 to 1925 the $50,000 exemption lost 37.7 percent of its real value. From 1987 to 1997 the $600,000 figure lost 29.2 percent. Neither is remembered as a tax increase. Both were.

Has the estate tax exemption ever been cut outright?

Twice, and both times in the 1930s. The exemption fell from $100,000 to $50,000 for 1932, and from $50,000 to $40,000 for 1935. Those are the only two nominal reductions in the entire 111-year series, and they arrived alongside the sharpest rate increases in the record.

The pairing is worth sitting with, because it runs against the shape people expect. The top rate went from 20 percent in 1931 to 45 percent in 1932, to 60 percent in 1934, to 70 percent in 1935 and to 77 percent in 1941, where it stayed until 1976. Across those same years the exemption was cut in half and then cut again. Depression-era revenue policy moved both levers in the same direction at once.

Then it stopped. Since 1935 the nominal exemption has never once gone down, and since 1977 it has never once failed to rise or hold. Every subsequent contraction of the exclusion has been the work of the price level rather than of a vote.

What did the 2025 law actually change for 2026?

More than the number. Section 70106 of the July 2025 tax law rewrote the machinery underneath it, and the amendment notes to section 2010 record the three moves precisely.

First, subparagraph (A) of section 2010(c)(3) now reads $15,000,000 in place of $5,000,000. That is the base amount itself, not a temporary multiplier applied to it.

Second, the multiplier is gone. Subparagraph (C), added by the 2017 law, was struck. It had read that for estates of decedents dying after 31 December 2017 and before 1 January 2026, subparagraph (A) was to be applied by substituting $10,000,000 for $5,000,000. That sentence was the entire legal basis of the doubled exclusion, and it was the entire legal basis of the reversion everybody had been planning around. Both are now repealed.

Third, the inflation clock was reset. The adjustment in subparagraph (B) applies to decedents dying in calendar years after 2026, and it now substitutes calendar year 2025 for calendar year 2016 in the cost-of-living calculation. Amounts round to the nearest $10,000.

One consequence shows up in a place nobody looks. The annual inflation revenue procedure has carried a unified credit item for years. Rev. Proc. 2025-32 does not. Its section 4 runs from the special-use valuation limit under section 2032A straight to the annual gift exclusion under section 2503(b), with nothing in between, and section 3.14 explains why: the 2026 amount comes from the statute rather than from an indexation calculation, and, in the document's own words, the basic exclusion amount will be adjusted for inflation for calendar year 2027 and future years. The same section fixes the generation-skipping transfer exemption at $15,000,000 for 2026. Section 4.42 holds the annual gift exclusion at $19,000, and sets $194,000 for gifts to a spouse who is not a United States citizen.

The counterfactual is usually quoted as a guess, and it does not have to be. The $13,990,000 allowed for 2025 was the $5,000,000 base doubled and then indexed, so the undoubled base for 2025 was exactly $6,995,000. Absent the 2025 law, the 2026 exclusion would have been that figure plus one year of indexation, and roughly half of what the statute now allows.

How many estates actually pay it?

Very few, and fewer than a decade ago, while the tax they pay has risen sharply. The SOI filing-year tables give the shape.

Taxable returns fell 92.9 percent between 2001 and 2023. Net estate tax rose 88.7 percent over the same period, and rose by a factor of 3.51 in the ten years from 2013 alone. The average taxable estate paid $455,000 in 2001 and $12.04m in 2023.

Set the taxable returns against deaths and the scale becomes plain. Estates generally file in the year after death, which SOI states in its own footnote to Table 1, so the 3,690 taxable returns filed in 2023 mostly belong to the 3,279,857 people who died in 2022, a figure the National Center for Health Statistics reports as final. That is 0.113 percent of deaths, or about one in 889. On the same basis the 2018 filings work out at 0.195 percent of 2017 deaths and the 2013 filings at 0.184 percent of 2012 deaths. SOI's historical series measures adult deaths rather than all deaths, which would push these shares fractionally higher rather than lower, and either way they sit two orders of magnitude below the 1976 peak.

Within that sliver the concentration is extreme. Of the 3,690 taxable returns filed in 2023, the 620 reporting a gross estate of $50m or more accounted for $33.78bn of net estate tax. That is 16.8 percent of the taxable returns paying 76.1 percent of the tax.

The revenue is correspondingly small. Estate and gift taxes brought in $29,462,045,090 in the fiscal year ended 30 September 2025 against total federal receipts of $5,234,616,386,315, per Table 9 of the Monthly Treasury Statement. That is 0.56 percent of receipts, down from $31,615,876,109 the year before. SOI records that the post-war norm ran between 1 and 2 percent, reaching 2.6 percent in 1972. The tax now raises about a fifth of its post-war share of the budget.

Is the exemption keeping up with inflation now that it is indexed?

Not quite, and the shortfall is measurable. In constant 2025 dollars the exclusion peaked in 2020 at $14,404,720 and has been lower every year since. The 2025 figure of $13,990,000 is 2.9 percent below that real peak.

The reason is the index. The adjustment in section 2010(c)(3)(B) runs through the cost-of-living calculation in section 1(f)(3), which uses the chained consumer price index, and the chained index rises more slowly than the CPI-U most people have in mind. Take the 2018 amount of $11,180,000 and carry it forward on CPI-U annual averages to 2025, and it lands at $14,333,821. The amount the statute actually allowed for 2025 was $13,990,000. The gap is $343,821, and at 40 percent it is $137,528 of estate tax on an estate that has done nothing but stand still.

That is small against a $14m exclusion and it is not an accident. Chained indexation was a deliberate revenue choice in the 2017 law, applied across the code, and the estate tax is one of the quieter places it shows up. It is also the mechanism that will now govern the $15,000,000 base from 2027 forward, measured from a 2025 starting point.

The wider caution is different in kind. Indexation protects the exclusion from the thing that shaped the first sixty years of this table, and it means the 1942 to 1976 experience cannot repeat itself in the same form. It does not protect the exclusion from repeal, and the two nominal cuts in the series are a reminder that the direction of travel is a policy choice rather than a law of nature. What the 2025 amendment removed was a scheduled reversion. It did not remove the possibility of a future one.

Frequently asked questions

What is the federal estate tax exemption for 2026? $15,000,000 per decedent, set directly by statute in section 2010(c)(3)(A) as amended in July 2025. The generation-skipping transfer exemption is the same figure. A surviving spouse may add any deceased spousal unused exclusion amount on top, provided the first estate filed a return and made the portability election.

When did the estate tax exemption reach $1m? For deaths in 2002. It had been $675,000 for 2000 and 2001. The step to $1,000,000 was the first move under the 2001 tax act, which also began the rate reductions that ran from 55 percent down to 45 percent by 2007.

What was the highest estate tax rate ever? 77 percent, which applied from 1941 through 1976. The top bracket during those years began at $10,000,000 of taxable transfers. The rate has been 40 percent since 2013.

Was there an estate tax in 2010? Only by election. The 2001 act repealed the tax for deaths in 2010, and the December 2010 act reinstated it retroactively with a $5,000,000 exclusion and a 35 percent rate, while letting each executor elect the repealed regime with modified carryover basis instead.

Does the exemption still fall back to about $7m in 2026? No. The provision that created the reversion, section 2010(c)(3)(C), was struck by the July 2025 law. There is no scheduled sunset in the current text.