You may have seen an interesting report in Monday’s Wall Street Journal, which took aim at estate tax uncertainty. The report includes experts from both sides making their best case as to why the estate tax should either be permanently repealed or reinstated, and also asked eight financial planners to weigh in on what their clients should be doing now, despite all the uncertainty. Access the full report here.
In “It’s Unfair, and there’s a better way,” Ed McCaffery argues the tax encourages bad habits among the rich and hurts the nation. His alternative? A tax on spending. In “It’s Fair, and we need the revenue,” Michael J. Graetz argues the tax ensures the rich pay their share — and these days, it’s crucial they do.
No matter which side of the debate your opinion falls, it is clear that just watching from the sidelines, waiting for the dust to clear is not a plan. Your clients need your help to ensure they are prepared for whatever Congress does — or doesn’t — decide to do. We all know if they do nothing, the estate tax will reappear Jan. 1, 2011, with a paltry $1 million exemption and a staggering 55% tax rate. Most think that won’t happen, but then again, most people didn’t think Congress would let the estate tax sunset for 2010, making this the best year tax-wise for the wealthy to pass away since the estate tax was created.