The Journal advocates for carryover basis. Although there is logic to their argument, it is virtually impossible to implement and administer. Especially because the complexities are compounded with special rules to exempt smaller estate and protect surviving spouses. Says the Journal:
But the best strategic outcome now is to let the death tax expire in January as scheduled under current law, and return to this debate next year when the tax rate is zero. Then let liberal Democrats explain to voters on the eve of elections that they must restore one of the most despised of all taxes.
This is a dangerous gamble. Advocates for full repeal seem to want to call the bluff of Democrats. But liberals in turn might be willing to accept a year without a federal estate tax if it means that the exemption goes back down to $1 million in 2011.
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