Don't Die in 2013: Confiscatory 55% Death Tax Set to Take EffectAmericans for Tax Reform
Jul. 22, 2012
Black Guy Walks Into Starbucks, Calls Them 'Racist,' Demands Free Coffee, Gets It Immediately
Laura Ingraham Interviews Comedian Who Requested Free Coffee From Starbucks As 'Reparations'
Syria Says U.S.-Led Strike Destroyed Pharmaceutical Research Institute Working On Cancer Drugs
UK Journalist Visits Syria, Local Doc Tells Him Douma Victims Suffered From Oxygen Starvation, Not 'Chem Attack'
Women's March Leader Slams Starbucks For Hiring 'Anti-Black' ADL For Anti-Bias Training
The 2001 tax relief bill (EGTRRA), drastically reduced the impact of the death tax over the course of a decade, so that it was eliminated entirely for one year in 2010 — a good year to die, joked a number of pundits. The bill lowered marginal rates and increased the applicable exclusion amount, but it also included a provision allowing individuals to carry over exclusion dollars that were unused by their spouse at the time of his or her death. This “portability” measure effectively increased the applicable exclusion for many households, in some instances putting millions of dollars beyond the reach of the federal government.
The death tax rose from the grave at the end of 2010, with a Bush-era top rate of 35% and an applicable exclusion amount of $5 million ($5.12 million in 2012).
In 2013, the death tax will revert to its antiquated, pre-2001 form. The applicable exclusion amount will plummet to $1,000,000, and the top marginal rate will leap twenty points to 55%. A 5% surtax will also return, to be levied on estates between $10 million and $17 million. This raises the top effective rate of the death tax to 60%.
According to research by the Tax Policy Center, if the current death tax expires, then the resulting, stricter exemption threshold will force 114,600 estates to file for the tax in 2013 — this represents a 13-fold increase from the previous year’s 8,800 estates, and countless wasted hours filling out tax paperwork. Of that cohort, an unfortunate 52,500 will be liable for the tax, way up from 3,300.