California Estate Planning Blog by Kevin Staker

March 10, 2010

Estate Tax News – March 10, 2010 by Kevin Staker

The Washington Post reports that Sander Levin, new House Ways and Means Chair, will address the issue of the estate tax.  They say the following:

“Levin said he is determined to make Ways and Means the “focal point” of the policy debate. He said he plans to meet this week with Senate Finance Committee Chairman Max Baucus (D-Mont.) to work out differences between the two chambers over the estate tax. Kevin Staker

The tax expired in December but is poised to spring back to life, at much higher rates, in January.”

The Wall Street Journal also interviewed Mr. Levin and states the following regarding the estate tax:

“Mr. Levin also said he wanted to create stability in the federal estate tax. The tax lapsed at the beginning of the year but will reappear in 2011, with individuals allowed to exempt as much as $1 million from a top tax rate of 55%. Mr. Levin is proposing a new top tax rate of 45%, while creating a more generous $3.5 million individual exemption.”

Hence, it appears Congress has not forgotten about the estate tax.  However, talk is cheap.  We shall see.

The Huffington Post in a posting by Bill Scher comments favorably on the estate tax in “Super Wealthy Deathly Afraid Estate Tax Would Reduce Deficit” on March 9th.  He thinks the wealthy should “pay their fair share.” Kevin Staker

Scher opposes continuing the Bush tax cuts, and believes  a 35-45 percent estate tax rate is not large enough to help hold down the deficit:

“But those massive tax breaks to the superwealthy don’t quite have the same juice they used to. Especially, the estate tax – levied on the inheritances of the wealthiest heirs in America,”

“This year, because of the Bush tax plan from his first term to gradually phase out the estate tax altogether, the estate tax is literally wiped off the books.”

Schher likes the re-distribution of wealth:

“But in 2011, it returns! Inheritance income above the $2 million threshold would be subject to a 55% tax. And after fanning the flames of deficit hysteria to squelch progressive reforms, corporate lobbyists are terrified that the estate tax would actually help reduce the deficit.”

He cites a Bloomberg report, “‘a revived estate tax at pre-2001 levels would collect more than $34 billion next year and about $410 billion through 2019.’ The wealthiest heirs having to pay their fair share and help cut the deficit. The horror!” Kevin Staker

Scher opines further:

“What’s stunning is the superwealthy’s lobbyist posse and the Senate’s conservative minority could just take what the House has already passed: locking in the estate tax at 45%, while exempting all inheritances below $7 million. That ain’t chump change! But that’s not good enough for the heirs who have no interest in paying their fair share and reducing the deficit.”

One may not agree with Mr. Scher.  However, it least the estate tax is receiving some attention

By Kevin Staker

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