President Obama’s recent Republican-friendly tax proposal has riled many Democrats.
President Obama’s recent Republican-friendly tax proposal has riled many Democrats. The deals are still far from being made. As CNN recently pointed out, and Bloomberg called before the fact, the estate tax could be the un-hitching point, as it is becoming the focus of disgruntled Democrat attention.
The Obama plan offers two benefits for those planning their estates: First, it appears to be the light at the end of the tunnel: we finally have a plan that might actually be put into place, so we can stop asking, “What’s going to happen in 2011?”
Second, and this may be more important to many, the proposed plan is an incredible “bargain” as far as transfer taxes go. The plan calls for a top estate tax rate of 35 percent, to be applied after a $5 million exemption. This is a far cry from the 2001 default possibility of a 55 percent top rate, with a $1 million exemption. And, it is even better than the 2009 estate tax, with a top rate of 45 percent and a $3.5 million exemption.
Of course, politics is politics. Democrats don’t like the plan, saying it unfairly extending tax cuts to the wealthiest. The disgruntled are saying that the estate tax is the most egregious aspect. Some pundits are predicting that enough Democrats may reject the proposal on the grounds of the need for an amendment to the estate tax, thus delaying a decision or changing the plan.
Politics and ideology aside, estate planning remains the careful art of keeping on your toes.Tags: estate planning, estate tax, tax proposal, transfer taxes