Saturday, November 6, 2010

Estate Tax Issue Offers Quick Test for Congress

by Richard Thaler

New York Times
November 6, 2010

After their election victory on Tuesday, Republican leaders in the House promised progress on many fronts, including a turn toward more fiscal discipline and less economic uncertainty.

They have a chance to start work on these goals almost immediately, because the lame-duck Congress soon will face a pressing issue that directly concerns both themes: the estate tax.

The uncertainty imbedded in this tax was actually written into the law in 2001 by a Republican-controlled Congress.

In what some wags have called the “throw momma from the train” provision, the law stipulated that the estate tax would disappear in 2010, only to reappear in 2011 at the lower exemption level and higher rates that were in place in 2001. (To give proper credit, this provision should really be called the “planned Bush tax increase.”) The law has made 2010 the best time for tax-conscious rich people to die


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