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When considering whether there can be a repeal of the
estate tax it is important to understand that politics,
as well as economics, govern the system. The pure essence
of this tax is to redistribute the wealth among the
classes.
The IRS is able to obtain a much greater rate of return
auditing estate tax returns than income tax returns.
Ten to twenty trillion dollars is anticipated to be
passed over the next several years to future generations.
The U.S. Treasury collected more than $23.5 billion
in estate tax revenue in 1999. In the year 2000, the
total is expected to exceed $26 billion.
However, last summer the press reported that Congress
passed a massive tax reduction bill that included the
future elimination of the estate and gift law on January
1, 2009. What was not reported is that the estate and
gift tax law was returned to our present system on October
1, 2009. This repeal was only scheduled for nine months.Before
a true change in the federal estate and gift tax law
occurs it is important to understand the repercussions:
Will the step up in basis be eliminated at death, which
would cause greater tax revenue? As recently as June
10, 2000, it has been reported that the U.S. House of
Representatives voted to repeal the estate tax. This
proposed legislation is reported to face major hurdles
in the U.S. Senate without bi-partisan cooperation and
the likelihood of that cooperation between the democrats
and the republicans diminishes each day as the presidential
election draws nearer.
It is interesting to note that a new report discloses
that when analyzing the value of an estate ranging from
$650,000 to $5,000,000, the resulting estate taxation
has statistically been 51.3% taxation of the estate.
It is also interesting to note that the U.S. Treasury
collected in excess of $20 billion in estate taxation.
PRESENTED BY:
Steven W. Tarta, Attorney at Law. 45 N. Broad Street
Ridgewood, NJ 07450 PHONE 201-444-8448 E-MAIL: TARTALAW@ATT.NET
Fax 201-612-0827Please be sure to check out www.tartalaw.com
for estate planning learning center information.
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