President Obama just announced at a press conference that he has directed Treasury Secretary Jack Lew to demand the resignation of the Acting IRS Commissioner, Steven Miller. CNN then obtained Miller's resignation letter...
- The Tax Policy Blog
- 365 Days until Estate Tax Mayhem Begins
365 Days until Estate Tax Mayhem Begins
Beginning tomorrow (2009), the federal estate tax will have a rate of 45 percent combined with a generous exemption level of $3.5 million. That's until Dec. 31, 2009.
On Jan. 1, 2010, the federal estate tax rate is scheduled to be zero. That's until Dec. 31, 2010.
On Jan. 1, 2011, the federal estate tax rate is scheduled to be 55 percent with an exemption level of only $1 million.
(Note in 2010 the unlimited step-up-in basis will also cease as there will essentially be no estate tax.)
All of this has many tax scholars wondering how death rates may be affected in late 2009 and late 2010. A person who is on his death bed this time next year may be in a position to save millions if he can just extend his life a few more hours (or have the doctor fudge the time of death). Two years from now, a person may be in a position to save his family millions by dying earlier (or again having the doctor fudge the time of death).
Research by scholars, most notably Joel Slemrod, has shown that a statistically significant death tax elasticity has existed in the past.
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