According to Rep. Cynthia Lummis, elderly estate-holders are foregoing dialysis in order to die before the estate tax hits in 2011. (Photo Credit: CC BY-SA/Shanel's mom/Wikipedia)
Provided Congress fails to pass legislation to keep it dead and buried, the estate tax will rise from the grave on New Year’s Day, 2011. According to the Associated Press, this has prompted many elderly estate holders and their heirs to consider desperate measures. U.S. Rep. Cynthia Lummis (R-Wy.) recently stated that a number of her constituents are even planning to stop dialysis and other life-preserving treatments so they can die before the door closes on 2010.
Estate tax: It’s not all in the family
While Rep. Lummis declined to name anyone she knew who planned to take the estate tax shuttle to the terminal end, she did hint at what many people in business may be thinking. Many ranchers and farmers in Wyoming would rather pass along their businesses to family than see it go to the government.
“If you have spent your whole life building a ranch, and you wanted to pass your estate on to your children, and you were 88-years-old and on dialysis, and the only thing that was keeping you alive was that dialysis, you might make that same decision,” Lummis told the AP.
President Bush’s tax cuts: A wealthy reprieve
Bush era tax cuts effectively buried the 45 percent estate tax (aka the death tax). It was an ideal time to be an heir to a dying estate holder. Inheritance, certain wage income, interest, dividends and capital gains were all shielded from the government. Estates smaller than $3.5 million ($7 million for married couples) have been exempt from the estate tax since 1916, and 2010 was the golden year when even the largest estates were exempt.
If the estate tax returns in 2011, the exemption level will be lower – estates less than $1 million will be exempt– but the tax rate will be higher at 55 percent. Joseph Thorndike of the non-profit Tax Analysts told the Wall Street Journal that jumping from zero to 55 percent would be “the largest increase in a major tax that (the U.S. has) ever seen.”
Sources
Did Big George duck the tax?
http://www.youtube.com/watch?v=uPqn2Zr0r-Y
This story needs to get more press. I actually just wrote an email to Jon Stewart. This is beyond the money, but has to do with our tax code incentivizing suicide this year. I have an easy solution. If people really want to have a death tax have it come in at a marginal rate each year. An expiration of the death tax will lead to people dying in order to pass a legacy primarily to their children.
I am completely against the Death Tax by the way. I hope our government does not ignore the fact that if the tax is coming back it shouldn't be at the large rate right away. Thank you for your story.