I frequently reference other blogs here. I’ll typically use such content as a jumping off point to ruminate on the same subject or to dovetail into a separate but related subject… Not this time.
This post yesterday from Hans Sarji who publishes Estate of Confusion – which is another honoree by LexisNexis as one the nation’s top 25 Probate, Elder Law and Estate Planning blogs – is just so good that all I can do is point your way to it and insist that you read it.
As of April 1, 2011, four representatives are cosponsoring the bill. Two representatives are Democrats: Rep. Dan Boren [D-OK-2], Rep. Kristi L. Noem [R-SD], Rep. Devin Nunes [R-CA-21], Rep. Mike Ross [D-AR-4].
Repeal estate tax. These representatives believe that the federal estate tax should be permanently repealed. They provide a number of reasons.
- Hurts family farms and small businesses. In the press releasefor H.R. 1259, Rep. Brady stated, “The Death Tax is still the #1 reason family farms and businesses in America aren’t passed down to the next generation. It’s the wrong tax at the wrong time and hurts the wrong people.” Rep. Boren explained, “Estate taxes are especially harmful to farmers, ranchers, and other small businesses because these operations tend to be capital-intensive with a high concentration of assets tied up in land, buildings, and equipment.”
- Destroys jobs. In a telephone news conference on March 31, 2011, Rep. Brady said, the estate tax “destroys jobs, lowering employment in America by 1.5 million jobs. And it’s because small business are responsible for 60 to 80% of all new jobs in the last decade, and ending the estate tax would give our economy a $119 billion boost.”
- Hurts savers. Rep. Brady asked, “Can you imagine working your whole life to build up a nest egg or family business – only to see Uncle Sam swoop in to take more than half of it upon your death?”
- Is poorly timed. Rep. Noem said, “The death tax is unfair and hurts family farms, ranches and small businesses at the worst possible time . . . Death simply should not be a taxable event.” Rep. Nunes argued, “There is no reason why American families should have to answer a knock on the door by the IRS during a time of sorrow.”
- Is a form of double taxation. Rep. Nunes referred to the estate tax as “one of the worst forms of double taxation in the United States. He explained, “Money that has already been taxed when a person is alive is taxed yet again at death.”
Repeal GST tax. In addition to permanently repealing the federal estate tax, H.R. 1259 would permanently repeal the generation-skipping transfer tax.
Permanent gift tax reform. Further, H.R. 1259 would keep the gift tax at rate of 35%, with an exemption of $5 million for individuals. The gift tax is currently levied at a rate of 35% for transfers over $5 million. But unless Congress acts, the gift tax is scheduled to increase in 2013. The rate in 2013 would jump to 55% and the exemption would drop to a mere $1 million. For more about this scheduled tax increase, see Wealth Transfer Taxes In 2013.
Effective date. Changes made by H.R. 1259 would be effective on the day the bill becomes law.
That’s all you get. Read the rest of the post here.
Damn fine job Hans. Keep up the great work.