Friday, August 12, 2005

Estate Tax: Exempt $3.5 million and tax the rest at 15% ?

According to today's Washington Post, that's the leading alternative to repeal at the moment.

By the way, why do reporters keep writing about the estate tax affecting "only the top 1%"? That top one percent represents those who leave the estates from which the tax is extracted. Being dead at the time, they don't really "pay" anything. Basically, their heirs pay. Mightn't an estate have two or three, six or eight, or even 10 or 12 heirs?


JLM said...

This Sunday New York Times article doesn't exactly favor repeal (surprise!) but it does make clear that Senator Kyl's alternative, noted above, is essentially a substitute for instituting carry-over basis. Basis would be stepped up, but at the price of a 15% estate tax.

While browsing the Sunday Times, take a moment to note Ben Stein's column on the need for businessman to dress as properly as businesswomen:

" . . . if everyone is dressed for a game of dodgeball instead of a game of "let's draw up a will," how will we tell the bosses from the associates?"

Jim Gust said...

Journalists use the 1% figure as a shorthand, plus there is no reliable data on the financial condition of the beneficiaries.

I think ditching carryover basis is important, probably important enough that retaining a 15% estate tax is a worthwhile trade.