Congress Incentivizes Death

I ran across this political morsel in – of all places – Tuesday Morning Quarterback on ESPN.com:

Today the first $2 million of an estate is exempt from taxation, meaning only about one estate in 100 is taxed. In 2009 the exemption rises to $3.5 million and fewer estates will be taxed. In 2010 there will be no estate tax. Then in 2011 the tax would return with a lower threshold than today, imposed on any estate above $1 million.

If the law stands as is, it will create some powerful moral, ethical, and financial dilemmas, particularly in the latter months of 2010.

10 thoughts on “Congress Incentivizes Death

  1. chris Post author

    There are some other very interesting loopholes coming up. For example, in 2008, the capital gains tax rate in the lower tax brackets drops to zero. Legislation is still pending for what will happen in 2009. Currently, the capital gains rate is 5% for those tax brackets.

    529 college savings accounts have had their tax-exempt status made permanent after a vote in Congress last fall. Good news for the parents of the world…and I never understood why people were so enthusiastic about 529s when their tax break was slated to expire in ’09 or ’10, with no guarantee of future legislation. Those people who did make the gamble have been rewarded.

    I had read about this estate tax but had not seen the particulars of the deal.

    Doug is alive!

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  2. chris Post author

    There are some other very interesting loopholes coming up. For example, in 2008, the capital gains tax rate in the lower tax brackets drops to zero. Legislation is still pending for what will happen in 2009. Currently, the capital gains rate is 5% for those tax brackets.

    529 college savings accounts have had their tax-exempt status made permanent after a vote in Congress last fall. Good news for the parents of the world…and I never understood why people were so enthusiastic about 529s when their tax break was slated to expire in ’09 or ’10, with no guarantee of future legislation. Those people who did make the gamble have been rewarded.

    I had read about this estate tax but had not seen the particulars of the deal.

    Doug is alive!

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  3. mike Post author

    I personally don’t agree with estate taxes. I can understand their purpose when you set the threshold at a VERY high number, but the money has already been taxed once. I wish the Federal Government would just pick one thing to tax, so that everyone knows what they are actually paying in (with the exception being the gas tax, as long as those funds go only to road development/maintenance).

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  4. mike Post author

    I personally don’t agree with estate taxes. I can understand their purpose when you set the threshold at a VERY high number, but the money has already been taxed once. I wish the Federal Government would just pick one thing to tax, so that everyone knows what they are actually paying in (with the exception being the gas tax, as long as those funds go only to road development/maintenance).

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