Estate tax changes might have inspired many to die before deadline
by Apr 1st 2009 4:00PM
One aspect of the new Federal budget that has drawn heavy criticism is the reinstatement of the estate tax for 2010. This tax was due to disappear next year as part of a George Bush tax phase-out. However, his legislation would have expired at the end of 2010, sending the estate tax back up to 55%. 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.
Also read Do-it-yourself funerals
