Estate Tax bru ha ha
From the New York Times:
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For much of the last eight years, the majority Republicans pushed through tax break after tax break that mostly benefited the wealthy. Now in the majority, Democratic lawmakers have failed to stop yet In 2010, the one-year repeal of the estate tax is coupled with a new tax that will hit smaller estates. That tax could affect up to an estimated 70,000 estates next year, compared with the current estate tax law, which applies to about 5,500 estates annually. If that sounds wacky, it is. It would also be harmful to many small family businesses, precisely the group that estate-tax cutters say they want to help. . . The Senate has failed to act. Republicans refused to consider the House bill or even a two-month delay to allow time for debate. Democrats correctly refused to consider a proposal to increase the exemption to $10 million for couples and $5 million for individuals, an unconscionable giveaway to the wealthy at a time when ordinary Americans are suffering. Compared with keeping the 2009 law, it would cost $250 billion more over 10 years. . . [AO: The estate tax is a tax imposed on the transfer of gifts upon death of an individual. Under Bush-era legislation, the estate tax was reduced, so that it applies to 5,500 estates annually, rather than 70,000 estates. However, included in that legislation was an agreement that suspended the estate tax for one year (2010) but resumes it at the pre-legislation level. If congress fails to act, this Bush-era legislation will run its course. The House has voted to continue the 2009 estate tax (which affects about 5,500 estates) permanently. In the Senate, Republicans refuse to act unless the exemption is raised from $7 million for couples ($3.5 million for individuals) to $10 million for couples ($5 million for individuals). The New York Times observes that allowing the current estate tax law to run its course, suspension in 2010 followed by resumption at a lower exemption rate in 2011, will be harmful to the other 64,500 estates that would otherwise remain unaffected if the 2009 estate tax is continued indefinitely. In other words, the estate tax exemption would be too low. On the other hand, the New York Times observes that demands by Republican Senators to increase the estate tax exemption would be “an unconscionable giveaway to the wealthy.” So, lower the exemption and the estate tax “hurts” too many people but increase it and it applies to (hurts?) too few. It’s nice to see that the Times has found legislation in which congress has set the exemption dial just right. Of course, there are arguments for both Republican and Democratic proposals. There are good reasons to continue the 2009 exemption (at $7 million for couple), allow the estate tax to be suspended in 2010 and resumed at a lower exemption in 2010 and, yes, even to increase the exemption as Republicans suggest (to $10 million for couple). This doesn’t mean that $10 million is the correct exemption, nor does it mean that $5 million is. Instead, whenever congress sets a fixed exemption amount that is not indexed, such exemption is worthy of subsequent revisits by Congress to ensure that the exemption remains appropriate. In that vein, the Senate should consider all options on the table that relate to the exemption amount, Democratic, republican or otherwise.] |
Read the full opinion HERE.
