The new budget extends the current 45% tax on estates of over $3.5 million (or a joint estate of $7 million).
Those who bemoan the loss of that one year free of estate taxes might want to look at a study by two North American professors who used IRS information to study the correlation between changes in the estate tax and mortality. They found evidence that people have a modest increase in their propensity to die just in advance of an estate tax increase.Another study by two Australian professors used data from 1979, when the country abolished the estate tax, that found that around 50 people more than expected managed to delay their deaths by a week, passing away after the estate tax did. Good news for the heirs, eh? Or were they kept on ice?
If the estate tax had dropped to zero for 12 months, who would have blamed older Americans if they showed a bit of paranoia on the first and last weeks of 2010? After all, capitalism shows us that people behave according to how they are rewarded.
Sounds like a perfect script for the show that ought to exist, Law & Order: Wall Street.
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