California Estate Planning Blog by Kevin Staker

December 18, 2012

Bloomberg Reports Obama Has Included the Estate Tax in His Latest Offer

Roxana Tiron & Hans Nichols at Bloomberg News report the President has included his proposal to return the estate tax exemption back to the 2009 level, a $3,500,000 exemption and 45 percent top rate. See http://www.bloomberg.com/news/2012-12-18/obama-concessions-signal-potential-bipartisan-budget-deal.html

One assumes he has proposed simply going back to the 2009 law.  This, hence, would also include the $3,500,000 being the exemption also for the gift tax and the generation skipping transfer tax.

On the other hand, the Republicans care much more about these taxes than the Democrats do.  Therefore, in a settlement I would guess we would end up with the law as it is in 2012.  However, the President may have learned to negotiate by now and could make the $3,500,000 stick if he wanted to.  He is in the power position.

Notwithstanding, I still believe they may  not reach a deal before Dec. 31 and so the House Republicans would give up at the last day and pass the Middle Class Tax Cut Act already passed by the Senate.

If I were Boehner I would offer take the $400,000 level for the tax rates and see whatever entitlement reform and other concessions he can get out of the President.  Otherwise, if the “go over the cliff” on January 1st the President will end up getting his $250,000 level.  The Republicans will then be under tremendous pressure from 98 percent of their constituents.

However, I would take one last shot at it if I were Boehner: offer to settle on $500,000 as the income level if the President drops the unemployment extension and gives a bit more on entitlements.  Actually come to think of it, that is probably what they will settle on today or tomorrow.

Please note, the Bloomberg article is the only article I can find that mentions the estate tax in relation to the fiscal cliff negotiations as of today.  The exceptions are two articles that I believe erroneously report the President’s latest offer includes only a $1,000,000 exemption.  I find them not credible.  The President has talked of the $3,500,000 since 2007.

We shall see.

Kevin Staker

Estate Tax News Blog

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1 Comment »

  1. LOOKS LIKE A GREAT DEAL OF POLITICIONS ARE HOPING TO MAKE THE WEALTHY WEALTHIER. THE AVERAGE AMERICAN SOULD NOT BEAR THE HEAVIEST TAXES. THE CUTS SHOULD STARS AT THE WHITEHOUSE AND GO DONE TO EVERY ELECTED OFFICIAL. FOUR YEARS OF SERVICE SHOULD NOT BE REWARDED WITH THEIR PAY FOR LIFE. YES I AM ONE OF THE LOWER INCOME PEOPLE WHO WORRIES ABOUT MY MONEY FROM ONE MONTH TO THE NEXT. I WOULD LOVE TO SEE “”TRUE AMERICANS”” MAKING THE DECISIONS THAT IS SUPPOSED TO BE HELPING. I THINK ANYONE THAT SERVES THE PEOPLE SHOULD DO AS THE PEOPLE WANTS, AND YOU POLITIONS SHOULD HAVE YOUR PAY CUT DOWN OR EVEN OUT SINCE YOU POSITION CARRIES ALOT OF MONEY WITHOUT TAKING MORE AND MORE. I THINK ALL POLITIONS SHOULD BE STRIPPED OF ALL PRIVILEGES THEY EXPECT US TO PAY FOR . I WOULD LOVE TO TAKE A TRIP AND HAVE THESE SELFISH ROAGES GETTING THEIRS FOR FREE. ONE DAY IT WILL BE DIFFERENT ONE DAY WE WILL HAVE POLITIONS THAT CARE ABOUT THE PEOPLE NOT JUST HOW MUCH MONEY THEY CAN TAKE AWAY FROM THE LESS FORTINUTE…

    Comment by Virginia Anglin — December 21, 2012 @ 2:53 pm | Reply


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