If You're Rich and Old, Please Try to Die Before December 31st, 2010
Who needs Death Panels when we have a Death Tax?
High, wealth-killing death taxes come back, in a big way, on January 1st, 2011. From the Wall Street Journal:
It has come to this: Congress, quite by accident, is incentivizing death.
When the Senate allowed the estate tax to lapse at the end of last year, it encouraged wealthy people near death's door to stay alive until Jan. 1 so they could spare their heirs a 45% tax hit.
Now the situation has reversed: If Congress doesn't change the law soon—and many experts think it won't—the estate tax will come roaring back in 2011.
It's what they call the "death incentive." Die in 2010, take advantage of markedly lower estate taxes, leave your heirs more of what you worked so hard for. Die anytime after midnight, January 1st 2011, and get hit, hard:
Not only will the top rate jump to 55%, but the exemption will shrink from $3.5 million per individual in 2009 to just $1 million in 2011, potentially affecting eight times as many taxpayers.
The math is ugly: On a $5 million estate, the tax consequence of dying a minute after midnight on Jan. 1, 2011 rather than two minutes earlier could be more than $2 million; on a $15 million estate, the difference could be about $8 million.
Is this any way to treat people who have worked hard, built businesses, and employed thousands?
"You don't know whether to commit suicide or just go on living and working," says Eugene Sukup, an outspoken critic of the estate tax and the founder of Sukup Manufacturing, a maker of grain bins that employs 450 people in Sheffield, Iowa. Born in Nebraska during the Dust Bowl, the 81-year-old Mr. Sukup is a National Guard veteran and high school graduate who founded his firm, which now owns more than 70 patents, with $15,000 in 1963. He says his estate taxes, which would be zero this year, could be more that $15 million if he were to die next year.
It's not as if Mr. Sukup hasn't paid taxes, and lots of them, since he started his business in 1963. It's not as if he hasn't employed thousands of people over those years, who also paid taxes.
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Jun '10
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
To the extent that you steal the rewards of hard work from someone, you make that person your slave.
An expanded death tax is also death for a significant amount of philanthropy. A lot of our best, most respected, local arts institutions--community theaters, museums, dance troupes--started with a million dollars (or less) from the estate of a devotee, directly, or in the form of a memorial. I hope the arts community will take note of who's doing this. It's not the Republicans. And if they hope to get the same help from government, they'll be very disappointed. That money will more likely go to pay bureaucrat pensions.
May '10
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
Democrats don't like philanthropy. The individual making an individual choice will always make the wrong choice. Only the enlightened government functionary can be trusted to make the wisest decision.
May '10
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
If you are ever debating taxes with one of your more progressive friends and they just won't accept that taxes influence behavior, show them this article.
Jun '10
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
Rob: This is an effort to lighten the conversation. I really don't have estate tax problems (certainly not with the stock market in the condition it's in), but, with life insurance, I'm worth a lot more to the family dead than alive.
Lately, I've been getting strange suggestions from members of the family. "Dad, base jumping could be a lot of fun for you." "Free climbing is the ultimate thrill--you should try it." "Come on, Dad, three Big Macs are good for you--have you ever tried melting cheese on those fries? They're great."
What should I make of all this?
May '10
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
tabula rasa: Rob: This is an effort to lighten the conversation. I really don't have estate tax problems (certainly not with the stock market in the condition it's in), but, with life insurance, I'm worth a lot more to the family dead than alive.
Lately, I've been getting strange suggestions from members of the family. "Dad, base jumping could be a lot of fun for you." "Free climbing is the ultimate thrill--you should try it." "Come on, Dad, three Big Macs are good for you--have you ever tried melting cheese on those fries? They're great."
What should I make of all this? · Jul 11 at 1:44pm
Eat your greens.
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
Tabula Rasa, there is that moment, isn't there? When you add it all up -- the house, the car, the insurance -- and you think, "Wow. I'm more valuable as a lifeless corpse."
So, my advice, teach your kids a lesson: tell them you've signed a living will -- one of those Advanced Health Care Directives -- that instructs them to do whatever it takes to keep you alive, under any circumstances. Tell them you want all of the machines, the advanced stuff, the pumps and centrifuges, all of it. Spare no expense! is what you should shout at them. I don't care if I'm brain dead! I want it all!
That should scare the little monsters. They'll be falling all over themselves making sure you don't stroke out one day and end up lying in a hospital bed somewhere, spending their inheritance.
May '10
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
Rob, the definitive line has already been written by Frances Goodich, Albert Hackett and Frank Capra. Remember the scene in It's a Wonderful Life when Jimmy Stewart tries to borrow against his life insurance policy? Lionel Barrymore sneers at him, "Why, George Bailey, you're worth more dead than alive!"
Who hasn't lived that moment?
Jun '10
Re: If You're Rich and Old, Please Try to Die Before December 31st, 2010
Rob Long: Tabula Rasa, there is that moment, isn't there? When you add it all up -- the house, the car, the insurance -- and you think, "Wow. I'm more valuable as a lifeless corpse."
So, my advice, teach your kids a lesson: tell them you've signed a living will -- one of those Advanced Health Care Directives -- that instructs them to do whatever it takes to keep you alive, under any circumstances. Tell them you want all of the machines, the advanced stuff, the pumps and centrifuges, all of it. Spare no expense! is what you should shout at them. I don't care if I'm brain dead! I want it all!
That should scare the little monsters. They'll be falling all over themselves making sure you don't stroke out one day and end up lying in a hospital bed somewhere, spending their inheritance. · Jul 11 at 11:22pm
Thanks for the advice. My Dad, who died last year, said that his greatest hope was to spend his last dollar and then fall over dead. He was far too prudent to really do that, but I always liked the thought.