Jim McDermott “Sensible Estate Tax Act of 2011” H.R. 3467
In a brilliant expression of populist demagoguery, Senator Bill McDermott introduced a bill that would impose the estate tax on estates that exceed 1 million dollars. The maximum rate of taxation would be 55%. Considering our massive federal and state debts, global economic turmoil and massive global protests railing against the inseparable principals of liberty and the free-market, we are certainly living in scary and uncertain times.
Whenever a politician hides his proposed legislation behind the façade of “sensibility”, the assumption should be that the legislation lacks sensibility. The “Sensible Estate Tax Act”, while being sold as being a tax on the nefarious rich, is actually a tax on middleclass Americans. Its really a revenue raising scheme targeting the federal middle class and designed to increase the political purchasing power of politicians seeking to win over local constituents.
Notwithstanding the difficulties in the current real estate and financial markets, its very easy for an average middleclass northern Virginian married couple to have 1 million dollars in estate assets. The average reader of this article may scoff at the idea that they should be concerned about the estate tax.
But consider the following generic examples:
Elderly Couple
500k Personal Residence
400k Husband’s Retirement Benefits
400k Wife’s Retirement Benefits
300k Stocks and Bonds
50k Personal Property
50k Automobiles/ RVS
Total Estate: 1.7 million
Amount Subject to Estate Tax: 700k
Young Couple
300k Personal Residence
100k Husband’s Retirement Benefits
100k Wife’s Retirement Benefits
50k Personal Property
50k Automobiles/ RVS
800k Term Life insurance
Total Estate: 1.4 million
Amount Subject to Estate Tax: 400k
As illustrated above, it doesn’t take very much for a person to have a million dollars worth of estate assets in our current market. The continuing inflationary nature of our monetary policy, coupled with the fancifully utopian inflationary rate promulgated by our government, greatly increases the likelihood that the purchasing power of a dollar will continue to decrease. Consequently, people will become poorer while there ultimate estate value will increase. With a 1 million dollar estate tax credit, the result can be significant on the upper middleclass.
To learn more, contact our office today for a free consultation.
Sincerely,
Luke Lenzi, Esq.