Skip to comments.Potential ‘death tax’ increase makes 2013 a very bad year to die
Posted on 07/22/2012 7:50:37 PM PDT by SeekAndFind
On Jan. 1, 2013, the estate tax is set to climb to as high as 55 percent among the highest in the world economy with the exclusion rate dropping to just $1 million, making 2013 a bad year to die for small businesses owners and the wealthy.
The estate tax often called the death tax had been on the decline due to the Bush tax cuts, even reaching zero in 2010. Since then, it has risen back to 35 percent, with an $5 million exclusion, where it remains today.
As blogged by conservative organization Americans for Tax Reform (ATR), research by the Urban Institute and Brooking Institutions Tax Policy Center says that if the current death tax expires, then the resulting, stricter exemption threshold will force 114,600 estates to file for the tax in 2013 this represents a 13-fold increase from the previous years 8,800 estates, and countless wasted hours filling out tax paperwork. Of that cohort, an unfortunate 52,500 will be liable for the tax, way up from 3,300.
While the tax would only affect 2 percent of the American population, ATR points out that its impact is far broader, is it causes many wealthy individuals to save less, choosing instead to retire early or, as Milton Friedman put it, dissipate their wealth on high living.
This reduction in savings, the report continues, means a concomitant reduction in investment, lessening the flow of capital to businesses and organizations where countless ordinary Americans are employed.
The estate tax has been under assault over the past year. Most recently, a coalition of non-profit groups and conservative Republican lawmakers has pushed for permanently repealing the estate tax and putting politicians of both parties on the record as to whether they support full repeal.
There are 217 co-sponsors for a bill to end the estate tax in Congress, with a 218th, The Daily Caller has learned, expected soon. Republican leadership, however, has appeared hesitant. (RELATED: Lawmakers, activists ratchet up pressure on GOP leaders for full death tax repeal)
In addition to the vote to extend current tax policy this month which we fully support our coalition of industry groups, the freshman class, and a large contingent of Republican Study Committee members are requesting that House leadership call a vote on Congressman [Kevin] Bradys bill to fully repeal the death tax this fall, Schoening Strategies President and Family Business Coalition Chairman Palmer Schoening told TheDC.
The Family Business Coalition is a coalition of policy and industry groups opposed to the estate tax. One member the 60 Plus Association, has already poured millions of dollars into ad buys in swing states this election cycle, pushing back against Obamacare and other laws it says are negatively affecting its members.
60 Plus is gearing up to make death tax repeal a key issue in major Senate and House races across the country through ad buys and televised campaign events, 60 Plus Chairman Jim Martin told The Daily Caller earlier this week. We are currently mobilizing over 7 million seniors to call for a vote on Congressman Bradys Death Tax Repeal Permanency Act of 2011′ to put House members on the record for the first time since 2006. Our seniors believe Republicans should always vote to kill the death tax, not wound it.
Oregon has a REPEAL the ESTATE Tax proposal heading to the voters in November (as long as the commie Sec of State doesn’t disallow signatures for not dotting their “i”....
Lord help me if my kids find that out.”
I love to take my son and his family on trips several times a year. Since I’m paying, we go places I want to go, do things I want to do and stay where I want to stay.
They always thank me after each trip and I always respond that I’m just doing my best I can with what money I have so they will have memories after I’m gone.
The “what do you want for Christmas” exchange is also interesting because I remind them that they need to be thoughtful about what they buy me because they will be getting it back one of these days. Have received some very interesting gifts including a new boogie board and kayak.
Guess Dec. 31 will be a bad day to be in the hospital with so many ventilators being unplugged before midnight.
Please let me know when you find a good year to die.
Fu#@ing spineless Republicans. Hate the lot of you. Burn in Hell.
The green bananas is toooooo funny. I guess I can add the “I know how you hate to pay taxes” to my list of reasons for spending their pittance of an inheritance also. Thanks.
Just because someone’s father worked all his life to build an estate does not mean that he didn’t want to leave 55% of it to some homie in Detroit instead of his own kids.
Green bananas? Rap, I don’t make reservations a week in advance.
OK, well as long as you know Jesus, you’ll be OK.
You have until December 31st 2012 to gift your children tax free up to 5 Million tax free.
Clarification please. I thought the limit was $13,000? I'll admit I'm confused.
BTW, that moment of peace by myself, in the blizzard, on the rocks, passing in and out of consciousness... and I realized that even no human was with me, I wasn't alone? Most memorable moment of my life. The pain sucked. But the peace was amazing.
If I was rich I long ago would have beat feet out of the US, the land of the free has turned into a nightmare of taxes and regulation that is killing small businesses. Sad what we’ve let happen.
Probably didn't fit into your time-frame, but remember when George Steinbrenner picked his year to die?
The libs were incensed that they missed out on picking his estate clean.
I found this from late 2010.....don’t know if anything has changed....I doubt it.... http://www.bloomberg.com/news/2010-12-14/estate-measure-creates-window-to-give-children-up-to-10-million-tax-free.html
In addition to the lifetime gift-tax exclusion, individuals can continue to give a tax-free gift of $13,000...a year
I'm thinking the $5 million is lifetime and the $13,000 is annual.
Sounds like it to me....also, looks as though there is a tax of 35% after $1 million.....(they just couldn’t get it all in the headline)
$13,000 per individual. So a couple can give $26,000 to someone per year, tax free. Best to spread it around before you die, to children and grandchildren, and if so inclined to friends. So it doesn't go to some homie in Chicago. Also pick up the tab for dinners and other expenses on a regular basis - it won't be seen or noted by IRS and is acceptable. Better that it goes to those you love, while alive, than to be recklessly stolen by the government after you die and deprive loved ones of the money.
The 401K early withdrawal penalty is going from 10 to 20 percent too.
RE: You have until December 31st 2012 to gift your children tax free up to 5 Million tax free.
Don’t forget this — INDIVIDUAL STATES HAVE THEIR OWN VERSION OF THE DEATH TAX TOO.
Some don’t, some like New York DO (in addition to the Federal death tax ).
Check with your accountant or lawyer.
They should repeal this tax. They should at least raise the amount of the exemption.
RE: They should repeal this tax. They should at least raise the amount of the exemption.
GET RID OF IT. It only causes more grief to the bereaved and massive family problems ( especially to small businesses ).
Romney promises to get rid of it totally, Obama wants to keep it. There’s one huge difference right there.