Not only has the reduction in the estate tax made the federal tax regime less progressive, it could make state tax policies less progressive as well. Andrea Coombs writes in the Wall Street Journal: Because of a federal law that has been phasing in over the past few years, the states' share of federal estate-tax revenue has fallen to zero, from 16% in 2001...Budget-challenged states are feeling the pinch. And a number of states have responded with some form of estate or inheritance levies of their own. Although Coombs focuses on the problems of estate planning vis-à-vis new and changing state estate tax laws, I see another problem. States could implement (and some have) their own estate taxes to make up for the shortfall. But there's a catch. States hoping to avoid an exodus of retirees who want to avoid paying an estate tax must now compete with each other. Essentially, this eliminates the estate tax in most states, and thus deprives them of an important income stream, forcing them to increase regressive taxes such as sales and property taxes.