I don't know if you saw this story in this morning's New York Times, but it illustrates the cost (to the Treasury) of the delay on the part of Congress to do anything about the estate tax.
As I mentioned in a post about a month ago, many estate lawyers had been thinking that there would be some clarity on the federal estate tax by Memorial Day. Well, the end of May has come and gone, and no action from Washington.
The problem is what steps, if any, investors should be taking in anticipation of estate tax law changes. At this point, it is simply not clear.
Here's a short excerpt from the piece:
Dan L. Duncan, a soft-spoken farm boy who started with $10,000 and two propane trucks, and built a network of natural gas processing plants and pipelines that made him the richest person in Houston, died in late March of a brain hemorrhage at 77.
Had his life ended three months earlier, Mr. Duncan’s riches — Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world — would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher — 55 percent.
Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan’s four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.
Estate Tax Dormant, Billionaire’s Bequest Is Tax-Free - NYTimes.com
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