Personal Finance (Not Investing) • Submaximal Estate Tax Brackets Moot after Year 2001?

Trying to simplify estate tax Form 706 in my estate planning spreadsheet. In 2002, the estate tax exclusion amount ( $12.92M for single decedents dying in 2023) was increased above the highest estate tax bracket floor of $1M. This suggests that every estate valued above the exclusion amount will be taxed on the difference at the maximum estate tax bracket of 40%, making the entire rest of the estate tax bracket table below irrelevant.
i.e. Estate Tax = [Estate Value - Exclusion Amount] x 40%
Am I understanding correctly that no taxable estate is ever taxed at any of the lesser marginal bracket rates?

page -6- Instructions for Form 706 (Rev. 09-2023)
Table A—Unified Rate Schedule
Column A
Taxable amount over
............Column B
............Taxable amount not over
........................Column C
........................Tax on amount in column A
....................................Column D
....................................Rate of tax on excess over amount
....................................in column A
$0...........$10,000.........$0...18%
10,000.......20,000.....1,800...20%
20,000.......40,000.....3,800...22%
40,000.......60,000.....8,200...24%
60,000.......80,000....13,000...26%
80,000.....100,000....18,200...28%
100,000....150,000....23,800...30%
150,000....250,000....38,800...32%
250,000....500,000....70,800...34%
500,000....750,000..155,800... 37%
750,000..1,000,000..248,300...39%
1,000,000 – – – – ......345,800...40%

Statistics: Posted by ThriftyInvestor — Thu Jun 27, 2024 2:54 am

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