Future of the estate tax

December 31, 2009
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It’s anybody’s guess how Congress will deal with the Dec. 31 expiration of the estate tax, but it’s certain that lawmakers won’t please everyone.

The tax, 45 percent on estates worth more than $3.5 million ($7 million for couples), ends in 2010 only to be scheduled for a comeback in 2011 at a significantly steeper rate—60 percent on $1 million or more.

As IBJ reporter Peter Schnitzler wrote recently, a 60-percent tax would severely cripple many entrepreneurs’ plans to pass along their hard-earned work to heirs.

Most observers expected Congress to update the Bush-era elimination of estate taxes before the deadline, but lawmakers instead kicked the can ahead. Now it’s virtually impossible for people to plan.

What do you think Congress should do? And what do you think about estate taxes in general?

 

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  • Estate Tax
    Tax relief is nowhere on this president's and congress' priority list.
  • Estate Tax
    Congress has seldom gotten it right. The whole concept of Estate Taxes is revolting as it's a convoluted attempt to impose double taxation on "We the People". Congress needs to simplify the tax code and concentrate on budget restraint. The irresponsible manner in which they manage "our money" is a total disgrace. The Estate Tax is a greedy money grab that stifles continuity in small businesses across the country. Taxes have to be paid in cash, the bulk of most estates is tied up in "restricted stock" or farmland passed down from previous generations, not cash. Congress will surely kill their golden goose.
  • Estate Tax
    Donâ??t count on Congress doing anything about the estate tax. Get ready for one-year repeal in 2010, no retroactive action, and a full blown return of the estate tax in 2011 to previous levels! Both sides will be screaming all the way to 2011 that the other side is obstructing something being done to help us. For years, the estate has been used as political club by both Democrats and Republicans alike. The Republicans claim they want full repeal and appeal to their core for political contributions to support the fight knowing full well that estate taxes will never be repealed. The Democrats use the issue as a populist club against the wealthy saying that charity giving will suffer if estate tax rates are lower and that estate taxes level the playing field to provide greater opportunity for everyone. All the time, both parties intend to do nothing about it except blame the other party for stopping something constructive from being done. The truth of the matter is that both Republicans and Democrats can and will take and spend everything you have, whether your dead or alive, to buy a vote or get pork barrel projects. The estate tax dilemma and the â??deliberate inabilityâ?? of Congress to act and resolve this matter in 2009, or any other year for that matter, shows exactly how broken and dishonest Washington has become.
  • namaste
    Estate taxes are traditional and reasonable means for governments to raise needed revenue. But a 40 or 60% tax of anything is confiscatory and unreasonable.
    • tax bills
      So, how does the government decide what is reasonable, when it is drowning in debt?
      namaste
    • tired of increasing taxes
      double taxation is unreasonable, expecially at 40 - 60%
    • crap crap & more crap
      there is no resonable tax rate that is fair on anybody's post taxed savings/estate. This money was taxed once already, taxing it again is absurd
    • Trusts and Foundations
      Does the estate tax repeal this year apply to what I imagine are trillions locked up in trusts and foundations? Getty, Ford, Rockerfeller, JP Morgan and the robber barons of yesteryear have had their capital gains and estates tied up in foundations and trusts in the market and compounding interest for scores of years. Can they pull out now? If so, can you imagine the wealth transfer that will occur when thee managers of these trusts and foundations pull out of the US economy this year and into tax friendly countries and foreign currencies?

      Did anyone notice the market sold off at unusually high volume the last 15 minutes and after hours trading on Thursday?

      Also, for IBJ reporters - it would be an interesting related article if you found out how much money Ruth Lilly's heirs lost to the estate tax because she passed 2 days before the new year.

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