By Dr. Merrill Matthews
Texas Insider Report: AUSTIN Texas If Congress fails to address the Estate Tax issue or any of those Bush Tax Cuts during a Lame Duck Session on January 1st the estate tax rate will skyrocket from zero to 55 on estates valued at more than $1 million.
I know that sounds harsh but after nearly two years under Team Obama harsh reality is the new normal. If you have even a moderate-sized estate or business and you are callous enough to want to leave a financial legacy to your children you now have less than three months to die.
Congress left Washington for the mid-term election break without doing anything about the estate tax or about any of those Bush Tax Cuts that the Democrats dont want to renew -- at least for higher income folks.
Yes a lame duck Congress coming back after the election could pass an extension of the estate tax. But if Republicans win big -- as many expect at least in the House -- the Democrats will be in disarray and may find it difficult to do anything.
And Republicans would have little incentive to agree to a Democratic compromise because within a few weeks they would have the majority and
could pass legislation to end the estate tax permanently.
President Obama might veto such legislation urging Congress instead to pass his proposal last summer to return the estate tax to the 2009 level 45 on assets exceeding $3.5 million.
However given the anti-Obama sentiment in the country compromising with the president would be roundly criticized by conservatives and the Tea Parties -- who will be there post-election to remind Republicans of their campaign promises if their memories start to slip.
Of course a good case could be and has been made about the economic benefits from ending the estate tax. But more importantly its the moral thing to do. Money and assets that people have worked and saved for and paid taxes on belongs to them. And they should be able to allocate it at death as they see fit.
Karl Marx saw all property as belonging to state. Hence the third plank in the Communist Manifesto (1848) was the abolition of all rights of
inheritance.
President Obama wants to meet Marx half way; Republicans should firmly declare no way.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas Texas.
