California Estate Planning Blog by Kevin Staker

November 3, 2010

Game of Chicken Continues

Filed under: estate tax,Kevin Staker — Kevin Staker @ 11:06 pm
Tags: ,

Democrats lose big in House.  Republicans make some gains in Senate.  Still it takes 60 votes in Senate to do anything.

Much to my surprise Harry Reid not tossed out by voters.  Reason- Angle just too extreme.  So he will still be Senate Majority Leader.  So what will happen?

Very difficult to predict.  However, may I give it a shot:

President and Republicans will continue to play chicken.  President  will say will only sign bill with tax cuts for the middle class.  Republicans will say no, cuts for all.  I believe both sides will blink and extend cuts for all for a year or two.

Relevant prediction here:  estate tax fix is left out of compromise.  They will want to keep it simple.  Or may be fixed for only the one or two years (at $3.5 million exemption and 45 percent rate).

Hence, for an estate planning attorney, such as me, the uncertainty will likely continue.

By Kevin Staker

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4 Comments »

  1. My question is:

    Don’t you think even Democrats would be committing political suicide by letting the tax go up next year? Don’t they feel their constituents would be angry at them? I mean don’t a lot more people have to pay federal estate tax if the exemption is 1 mill? Maybe I don’t get it…

    Comment by Phil — November 4, 2010 @ 8:59 pm | Reply

    • I do not feel would be political suicide. Not that important of an issue to most folks. The issue will be with their rich donors. They will not be amused. This is another reason why it is so bizarre we are where we are now.

      Comment by kevinstaker — November 9, 2010 @ 12:17 am | Reply

  2. OK,let’s say Congress does nothing on estate tax…and it goes to 1 mill exmpt/55% on Jan 1. If Congress then changes it sometime during the year, say to 3.5 exmpt/45% will an estate where the person dies during the time of 1 miil/55% be able to retroactively use the 3.5/45?

    Comment by Phil — November 5, 2010 @ 11:17 pm | Reply

    • Depends on what the last change in the law says at that time. It is a real possibility they would make it retroactive if passed after January 1st. Quite a mess now and likely in the future.

      Comment by kevinstaker — November 9, 2010 @ 12:15 am | Reply


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