Taxes Are More Certain Than Death?

Ernest Istook / December 09, 2009

Timing is everything in life. And in death. America’s level of death taxes is a bouncing ball—a political football because Congress is fumbling around with legislation that makes a dramatic difference measured in jobs as well as in dollars.

As the law is now, anyone who dies during 2010 will pay no estate tax. But die in 2009 and the rate is 45% of the taxable estate. Die in 2011 or later and it’s 55%. The amount exempted from tax also fluctuates from $3.5-million this year to immaterial next year and then $1-million in 2011.

Anyone who’s confused can be forgiven. But the muddle gets worse. Although the Senate is yet to act, the House recently voted by 225-200 to keep the death tax alive permanently at its current rate but changing the exemption to $7-million. The Senate could tweak the details even further. (more…)