In April Russia's President Vladimir Putin called for an end to inheritance tax. On June 15, 2005, Russia eliminated this source of double taxation. The State Duma, the lower house of the Russian parliament, by an overwhelming vote of 414 to 2 passed the draft law abolishing inheritance tax in the third reading required for passage. It eliminated current taxation of estates at rates ranging from 5â€“40%.
The law, which takes effect January 1, 2006, also abolishes gift tax to close relatives, including spouses, parents, children, grandparents, grandchildren, siblings, and step-siblings. It eliminates current taxation of gifts to close family members at rates of 3â€“15%, and for non-family members at 10â€“40%, replacing the latter with the flat rate of 13%.
Can the US learn from Russia (which has also instituted a flat tax)? The American Family Business Institute is a great resource for more information.