Estate Tax Repeal - Off Again, On Again, On Hold Again
Category: Estate and Inheritance Tax
The on-again, off-again, on-again saga of federal estate tax repeal, is on hold again. Bloomberg.com reports in part:
"Senate Majority Leader Bill Frist postponed a vote on a measure to exempt most multimillionaires from federal estate taxes after conceding Republicans lack the votes to pass legislation adopted by the House last week.
The delay is the third since Frist began his quest to repeal or reduce the tax last year and the second time this month his ambitions were thwarted by Democrats who say the government needs the revenue generated by the tax. The House passed the legislation 269-156 on June 22 after Frist urged it to act before the Independence Day recess next week.
[Senator John] Kyl said Senate Republicans are determined to pass the legislation this year, though they want to ensure they have the 60 votes needed to withstand a challenge by Democrats. Republicans control 55 seats in the chamber; 60 votes are required to overcome filibusters, the legislative maneuvers that can kill legislation.
House Measure
The House legislation would spare all but about 2,800 multimillion-dollar estates from federal tax by exempting the first $10 million of a couple's estate from any tax. Estates valued between $10 million and $25 million would be taxed at the capital-gains rate, while estates of more than $25 million would be taxed at top rates of 30 percent to 40 percent.
The measure, which would take effect in 2010, also includes a tax break for timber companies intended to lure Senate Democrats from timber-producing states such as Washington, Arkansas, and Louisiana.
The measure, characterized as a take-it-or-leave-it offer by House Ways and Means Committee Chairman Bill Thomas, a California Republican, has had a lukewarm reception in the Senate.
2,800 Estates
Under current law, 12,600 estates -- or less than 1 percent of all people who die -- will be subject to the tax this year, according to estimates by the Tax Policy Center, a non-partisan research institution in Washington. The center estimated that a plan similar to Thomas's would reduce the number of taxable estates to 2,800 and would cut their tax rate to as low as 15 percent from about 45 percent.
The legislation also repeals a federal deduction for tax payments to the 23 states that retain their own estate or inheritance taxes, including Washington, Tennessee, Ohio, New York, New Jersey and Connecticut. That would subject residents of those states with large estates to double taxation, said Harley Duncan, executive director of the Federation of Tax Administrators, a Washington-based association of state tax officials. "
posted by Deirdre R. Wheatley-Liss, Esq. @ 3:11 PM
1 comments
1 Comments:
I see a lot of the big picture in my job as a Digital Communications Consultant for real estate and financial services firms... and I see a lot of people suffering badly from property taxes that shouldn't even exist!
I just don't see the validity of any estate or inheritance tax. This is double dipping, friends, no matter how we look at it. Repeal this, or reconsider that -- any way you view it -- inheritance assets, especially cash accounts and investment assets left to heirs or beneficiaries... This was once income, generally speaking. Correct? Someone worked for that income before it was left to someone else as an inheritance, and it was taxed, correct? So estate or inheritance is strictly double dipping the public! Income that was or is taxed twice.
Secondly, I'd go so far as to say that not only should we have zero estate and inheritance taxation -- every state in the union should mirror California, in terms of avoiding property tax reassessment!
Moreover -- 98% of Americans, mostly middle class people, are strapped for cash most of the time... virus or no virus. Therefore, every state in America should allow beneficiaries of trusts and heirs of estates to get a loan to an irrevocable trust... and even buyout other beneficiaries, usually siblings, with a tax break similar to California Proposition 58 and Prop 193, keeping property taxes low upon property tax transfer when inheriting property from parents and grandparents... Plus maintain something similar to CA Proposition 13, retaining a low property tax base for heirs and beneficiaries, that parents paid -- saving a lot of money on most property transfers, PLUS keep parents property taxes -- thus allowing beneficiaries who do not wish to sell out, to keep a beloved home inherited from parents they love, which most middle class beneficiaries otherwise, could never afford to keep.
California is unfortunately still the only state where you can avoid property tax reassessment at current rates; capped at 2% taxation, thanks to good old 1978 CA Proposition 13... Plus Californians get to keep parents property taxes, and transfer parents property taxes, inheriting property taxes at a low base rate... having the ability to use Prop 58 property tax transfer, with parent to child transfer or as lawyers call it, parent to child exclusion – in California we can buyout siblings or even keep contested property from parents with a trust loan -- covered on niche Websites like https://cloanc.com/category/prop-58 Trust loans working with a measure similar to CA Proposition 58 or CA Prop 193 make it possible for beneficiaries to sell shares of inherited property, called a beneficiary buyout of sibling property shares, or as attorneys put it, “the transfer of property between siblings”, and “lending money to an irrevocable trust“ – typically from an irrevocable trust loan lender. The fact is, we need to know our rights thanks to these tax breaks... We should know how to buy out beneficiaries' shares of inherited property; and how sibling-to-sibling property transfer works. Moreover, all Americans should know how loans to irrevocable trusts can help co-beneficiaries get cash while avoiding selling their share of an inherited house -- keeping yearly taxes on property at parents rates, forever. No other state allows this. If you doubt any of this, which apparently some folk do these days -- just check out CA State Board of Equalization, at https://www.boe.ca.gov/ or research some informative blogs like https://propertytaxtransfertrusts.com
So instead of everyone worrying only about estate tax and death taxes and inheritance tax -- we should also be working on forcing our political representatives to pass a bill for Universal property tax breaks for ourselves, in every state!
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