From cnbc.com:
The estate tax—gone for 2010 but back in 2011—will have changes that should make it less painful for taxpayers. That’s if the current Obama tax cut plan crafted with the GOP becomes law.
The feared provisions—a 55 percent rate on estates valued at more than $1 million for individuals and $2 million for couples—were set for automatic return next year.
Now, as part of the proposed two year extension of the Bush tax cuts and the extended unemployment benefits, estate tax payers face a rate of 35 percent with an exemption up to $5 million.
The proposal also lets survivors combine their exemption with that of a spouse who has died, for a total exemption of $10 million—almost guaranteeting they would not pay.
“The best part of this plan is that it’s better than the 2011 provisions,” says Ryan Ellis, tax policy director at the conservative Americans for Tax Reform. “But it’s worse than 2010 when there was no estate tax. Thirty-five percent will become the new normal, I hope, and we can work to get the rate down from there. This will help the economy with keeping more money in the hands of people.”
An estimated 40,000 of the largest estates will skip the estate tax under the new rates, leaving only around 3,500 estates that will owe Uncle Sam. One analyst says that’s too much lost tax revenue in a struggling economy.
“The estate tax is a fairly small revenue generator, but it’s $300 billion over ten years that’s lost with these new rates,” says Benjamin Harris, a senior research associate at the Brookings Institute. “Those are taxes that have to be made up elsewhere or we’ll have even more deficits. There are also better ways to stimulate the economy, then cutting taxes for the rich.”
Estate tax reform for 2011 has been slow to develop. Republicans and Democrats talked compromise on provisions through much of the year and several proposals were made before the November midterm elections—but to no end until now.
“I never thought it would get to this point. It’s stunning really, what Congress has failed to do to fix this,” says Eric Green, an estate tax attorney and partner at Convicer, Percy & Green, in Glastonbury, Connecticut.
“With this being only a two-year plan, it is hard to advise clients for the future,” Mason adds. “It’s conceivable that if the Republicans win the White House and Congress in 2012, they would repeal the estate tax completely. But there’s no guarantee that will happen.”
“It’s weirdly amusing to say but it’s like the late New York Yankee owner George Steinbrenner,” says Green. “If you had to pay the estate tax and you had to die, this was the year.”
http://www.signonsandiego.com/news/2010/dec/15/escondido-council-approves-moving-ahead-ballpark/
The ballpark would have 7,500 permanent seats and room for another 1,500 people to sit on a grass berm in right field. The dimensions of the field would be identical to those of Petco Park, home of the Padres.
Shouldn’t the Padres move to Escondido, and the Chargers take Petco Park?
As ballpark deals go, that looks like a fairly decent one. Lots of times the city basically gives the ballpark to the team for free.
It would be a great PR move if the Chargers did a preseason game at Petco like the football games recently held at Wrigley Field and Yankee Stadium. I’m sure the field is large enough (even if both teams had to go in the same direction like Wrigley).
Great way to ‘test out’ downtown football.
So if you have lot of assets shouldnt you transfer those assets to heirs before you keel over?It has gotten awfully expensive to die.I thought about selling caskets on craigslist to make a couple bucks.
robosigner…
You could be on to something. Costco is already in the casket business:
http://www.costco.com/Common/Category.aspx?cat=23078&eCat=BC%7C20595%7C23078&lang=en-US&whse=BC
4. I think you can only transfer $10k per year per person ($20k for a couple) without the recipient having to pay gift tax.
Estate Taxes are the most progressive tax we have so those in favor of progressive taxes probably would dislike this change. I don’t really have a problem with estate taxes either way but I don’t stand to benefit from any inheritance so high estate taxes would probably be a benefit to me.
I do think there should be some kind of provision to claw back government benefits like pensions and ss before those benefits are passed on to the kids. I.e. if you received $200K in SS benefits but have an estate of 1 million dollars shouldn’t the taxpayers receive there $200K back rather being able to leave it to one’s children.
livincall, are you psychotic? What do you mean “give it back.” We pay into social security benefits all our working lives! The POINT is to oppose ANY new taxes, PERIOD! The government has plenty of money to manage this country. YOU keep your stinking paws out of MY pocket, you lowlife! I don’t care if it’s you doing it yourself, or you doing it by government proxy. Get a LIFE, and keep your stinking paws on your OWN money!
NO NEW TAXES!
@ DNR – no disrespect intended but you are incorrect on your understanding of the tax code in regards to gifts and estates. Best not to post on that topic unless you are familiar with it.
@livinincal – please explain to me why my parents, who earned modest salaries all their working lives, and who denied themselves vacations, clothing, new cars, meals out, and who never had a housekeeper, a gardener, a painter, a maintenance man, a mechanic, but instead saved and invested a large percentage of those salaries instead of spending their money on consumables, done with the specific and directed goal of leaving an inheritance for their children, should give back their pensions?
the caskets at costco are pretty pricey.I want to make biodegradable ones out of wood.We can get some more carbon out of the air by storing it underground in wood.
LOL, “give back”? There is the problem wit that mindset.
livinincali, the only “give back” should be to those who worked hard and paid 6.5% of their lifetime income into the SS fund. If they die without collecting, it should be given to a relative. They should all collect regardless of their net worth. Getting what was taken from you is the only fair thing to do.
“please explain to me why my parents, who earned modest salaries all their working lives, and who denied themselves vacations, clothing, new cars, meals out, and who never had a housekeeper, a gardener, a painter, a maintenance man, a mechanic, but instead saved and invested a large percentage of those salaries instead of spending their money on consumables, done with the specific and directed goal of leaving an inheritance for their children, should give back their pensions?”
I am concerned with public pensions, i.e. government workers. I fail to see why a child of a public servant deserves access to the taxpayers money. Ultimately the children of those who weren’t public servants are the ones who have to pay for this.
I guess in the end it doesn’t really matter the harsh reality will be forced on us when we can least afford it because it is unpopular to put the burden on anyone other than the rich. Of course we oppose an estate tax which effects the rich the most so we can leave our children a pittance in comparison.
I’m completely fine with the libertarian view point so less taxes is fine as long as we dramatically scale back medicare, social security, military spending and every other entitlement.
This is the wrong place for this discussion though, so back to housing.
DNR, the recipient never pays tax on money received as a gift. The giver pays tax, but only after exceeding $1,000,000 in lifetime cumulative gifts. Also, the amount of the exemption is $13,000 per year. So if you gave someone $50,000, you can exempt $13,000, and then you report the other $37,000 on a gift tax return (Form 709). That $37,000 counts against your lifetime exemption.
I like the direction the Escondido council is taking on the ballpark deal, speaking as an Escondido income property owner.
The claw back is not unreasonable for current and near future recipients of social security.
These people paid SS at a MUCH lower rate then the current ~7.0%. If you go back in time the rate was as low as 2% and was also around 4% for a long time.
This was not enough to justify the current payouts. In other words, they are receiving, on average, much more than they paid in.
Same with government pensions, etc.