The Big Picture
I have a growing fear that the U.S. Congress is ineffective. Congress’s failure to “fix” the estate tax by 12/31/09 is another example.
As of today, there is no Federal Estate tax. Financial and estate planners have been predicting for over 5 years that Congress will amend the estate tax law due to its inequitable flip-flop of $3.5 Million exemption in 2009, NO estate tax in 2010, and only a $1 Million exemption in 2011. The House passed a bill in early December to “fix” this problem; but, the Senate failed to act. One scenario could prompt Congress to do something: assume a very rich American billionaire – let’s assume with a $5 Billion net worth - dies in January and one of the leading newspapers trumpets that Congress’ failure to act has just cost the American taxpayer over $2 Billion because there is no estate tax. That could cause some embarrassment in Congress, to say the least. Congress could enact the estate tax law “fix” retroactively to 1/1/2010.
As of today, there is no Federal Estate tax. Financial and estate planners have been predicting for over 5 years that Congress will amend the estate tax law due to its inequitable flip-flop of $3.5 Million exemption in 2009, NO estate tax in 2010, and only a $1 Million exemption in 2011. The House passed a bill in early December to “fix” this problem; but, the Senate failed to act. One scenario could prompt Congress to do something: assume a very rich American billionaire – let’s assume with a $5 Billion net worth - dies in January and one of the leading newspapers trumpets that Congress’ failure to act has just cost the American taxpayer over $2 Billion because there is no estate tax. That could cause some embarrassment in Congress, to say the least. Congress could enact the estate tax law “fix” retroactively to 1/1/2010.
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