California Estate Planning Blog by Kevin Staker

October 12, 2010

Excellent Article on Game Theory and the Estate Tax Chaos in Congress

Filed under: Kevin Staker,Other Kevin Staker Blogs — Kevin Staker @ 4:19 pm
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Donald B. Susswein in an article at benzinga .com has a great application of game theory to the estate tax chaos in Congress.  His analysis largely agrees with this author’s postings regarding the game of chicken going on between the Democrats and the Republicans.  He points out that in the lame duck session President Obama and the Democrats can argue the Republicans are holding the middle class tax cuts “hostage”.  On the other hand, assuming we end up with a Republican Congress (at least a majority in the House and enough moderate Democrats in the Senate) to pass a tax act extending the tax cuts for all income levels, then the President and the Democrats will be labeled as holding hostage the tax cuts for the middle class if the President vetoes such a bill.
By Kevin Staker

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July 29, 2010

Appears Likely Exemption Now Narrowed Down to $1,000,000 or $3,500,000

Filed under: estate tax,Kevin Staker,Other Kevin Staker Blogs — Kevin Staker @ 5:06 pm
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The Wall Street Journal and a number of other media outlets report Majority Leader Reid is not allowing the Kyl-Lincoln amendment to the Small Business bill.  He apparently opposes the amendment on its merits, a transition to a $5,000,000 exemption and only a 35 percent estate tax rate.

Hence, it now pretty clear that he is going to allow at most a $3,500,000 exemption with at least a 45 percent top rate.  The question then is is Mr. Reid going to stymie any attempt to change the post 2010 estate tax law and allow the $1,000,000 exemption and 55 percent top marginal rate to go into effect in 2011.

By Kevin Staker

March 13, 2010

Estate Tax News – March 13, 2010 by Kevin Staker

Filed under: estate tax,Other Kevin Staker Blogs — Kevin Staker @ 1:22 pm
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The Frum Forum has interesting dueling articles on Why the GOP Should Support the Death Tax and Why the GOP Should Oppose the Death Tax.   The Republican  Party has long opposed the federal estate tax.

In his article,Cetulus”, apparently a pen name for an estate planning attorney who wants to remain anonymous to his Republican clients, argues not only is the estate tax a great deal for taxpayers, but it is also a sound pro-growth alternative to high marginal income tax rates. Kevin Staker

On the other hand, Brian Domitrovic, a professor at Sam Houston State University and author of Econoclasts, however responds that the estate tax would only discourage work and investment.

Cetulus argues:

The GOP has long stood for a pro-growth tax system.  Thus, Republicans have favored low income tax rates, and have even argued for replacing the income tax with a more growth-friendly tax such as a tax on consumption.  The estate tax, meanwhile, is about as pro-growth a tax as one can hope for.  Not only that, but it has existed for almost 100 years. To create a more pro-growth tax system, Republicans don’t have to design a whole new tax from scratch. A pro-growth tax is already there to be exploited.

Professor Domitrovic, on the other hand, states:

Studies (such as here) of the estate tax have shown that returning to the old rate north of 50% would result in $2 trillion less in gross yearly reported estates. The lost $2 trillion represents both money entrepreneurs will spend and otherwise forsake from making in view of the estate tax, as well as the efforts undertaken (at great expense) to shield inheritances from the code. The efficiency, output, and employment consequences for the economy will be very high if we bail out to a high tax on estates – unless, of course, the self-made are so motivated that all they really care about is the thrill of the chase, or little blue ribbons.

The article in favor of the estate tax is more down to earth and understandable.  The article in opposition really does sound like it is from a college professor.  However, both have great arguments.

By Kevin Staker

March 11, 2010

Estate Tax News – March 11 by Kevin Staker

Filed under: estate tax,Other Kevin Staker Blogs — Kevin Staker @ 1:11 pm
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The Hill in an article by Jay Heflin reports that one of the most powerful business organizations that lobbies Congress has given up for now its quest for full repeal of the estate tax.  They say that:

Democratic control of Congress has prompted the National Federation of Independent Business (NFIB) to change its tune on estate tax repeal and support a less ambitious approach.

The powerful lobby for small businesses has accepted that it can’t win an outright repeal of the tax in this political climate. So it has backed bipartisan legislation that would create a 35 percent tax on estates worth more than $5 million.

They report that the NFIB believes it can revive a proposal from last year to have an exemption of $5,000,000 and a maximum rate of 35 percent.  The bipartisan bill was proposed by Senators Kyl and Lincoln with the support of 10 Democratic senators.

They report that Senator Kyl recently had told The Hill that:

[H]e opposes creating an estate tax that is retroactive to January because it could create an endless stream of litigation as taxpayers cry foul over being taxed subsequent to receiving their inheritance.

He also floated the idea of presenting taxpayers with a choice of either abiding by current estate tax law or complying with whatever level of tax is created later this year.

They also report that:

[S]ome observers recently told The Hill that the midterm elections in November might prompt congressional action on the tax as lawmakers risk political damage for not fixing the tax sooner and keeping taxpayers in the dark on the issue.

I had seen but failed to note the location of an article that stated that the author believes, and I agree, that the longer Congress delays in acting on the estate tax the more it strengthens the hand of Senator Reid and the other Democratic leaders of preventing an increase in the exemption to $5,000,000 with the 35 percent tax.  The delay would increase chances of a $3,500,000 exemption and 45 percent rate.

Personally I believe they will not act at all and we will go back to $1,000,000 with a top rate of 55 percent in 2011.

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

Temporary Change in Blog Name by Kevin Staker

Filed under: estate tax,Other Kevin Staker Blogs — Kevin Staker @ 1:28 pm
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The federal estate is in disarray.  Congress and the President unfortunately have allowed the estate tax to expire for only one year.  One may, and I am one, oppose the basic concept of the Estate Tax.  The problem is that under present law the Estate Tax will return in 2011 with only a $1,000,000 exemption and a 55 percent top rate.  Human nature what it is, a strong desire to save taxes, rich people who are old or infirm will have an incentive to commit suicide before the end of 2010.  This is horrible tax policy. Kevin Staker

I am following the news daily regarding the moves, or rather the present lack of action, in Congress and by the President regarding the Estate Tax.  My thought is I will post the news I find, hopefully frequently, to aid anyone who wants to be well informed on the Estate Tax.

After the issue gets resolved, hopefully by the end of the year, I will return this theme of this blog back to estate planning in general, in particular, California estate planning. Kevin Staker

My hope that a search for news regarding “estate tax” will yield a link to this blog.  We shall see.  I have set up a search alert. Kevin Staker

By Kevin Staker

June 13, 2009

Personalized Web Address of Kevin Staker on Facebook

Filed under: Kevin Staker,Other Kevin Staker Blogs,Uncategorized — Kevin Staker @ 2:24 pm
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Facebook now allows a personalized web address for its users.  Before each user just had a number assigned as part of their web address.  The Facebook address of Kevin Staker has now been changed.  It is http://www.facebook.com/kevin.staker.

Facebook is the main social media site of Kevin Staker.

May 26, 2009

Kevin Staker is on Facebook

Filed under: Other Kevin Staker Blogs,Uncategorized — Kevin Staker @ 4:18 am
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Kevin Staker had failed to disseminate widely that he has Facebook page at  http://www.facebook.com/kevin.staker.  Kevin Staker is an estate planning attorney located in Camarillo, California, specializing in living trusts.

Some Additional Sites with Information on Kevin Staker

Filed under: Other Kevin Staker Blogs,Uncategorized — Kevin Staker @ 3:44 am
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Additional websites with information on Kevin Staker, an estate planning attorney in Camarillo, California are the following:

Google Profile of “Kevin Staker”: http://www.google.com/profiles/kevinstaker

Xing Profile of “Kevin Staker”: https://www.xing.com/profile/Kevin_Staker

Zoominfo Profile of “Kevin Staker”: http://www.zoominfo.com/MyAccount/ProfessionalSummary.aspx

FastPitch Profile of “Kevin Staker”: http://www.fastpitchnetworking.com/profile.cfm?ContactID=52360988&Show=Home&Style=3

Windows Live Profile of “Kevin Staker”: http://cid-0907f2eadac514a0.profile.live.com/#

Kevin Staker at Lead411 is located at http://www.lead411.com/Kevin_Staker_239936.html

Jobster Profile of Kevin Staker is located at http://www.jobster.com/people/kevin_staker

Kevin Staker mainly assists clients with living trusts and estate and trust administration.

May 14, 2009

Press Room of Kevin Staker

Filed under: Other Kevin Staker Blogs,Uncategorized — Kevin Staker @ 12:40 am
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The profile of Kevin Staker of StakerLaw Tax and Estate Planning Law Corporation has been updated at http://biz.prlog.org/KevinStaker/ The PrLog Pressroom of Kevin Staker is located at http://pressroom.prlog.org/KevinStaker/

Prlog is the site where Kevin Staker posts press releases regarding his law practice. Kevin Staker is an attorney in Camarillo, California, and specializes in estate planning and taxation.

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