For the deep-pocketed elderly, 2010 is the perfect year to die--if you're thinking exclusively about tax law, that is. Starting January 1, the estate tax will drop to nothing for one year before zooming back up to a 55% rate in 2011. To beat the tax man, the Wall Street Journal reports that the rich and ailing are clinging to life through the year's end. One dying real-estate entrepreneur is so determined to live until the law changes he asks his lawyer what day it is every time he wakes up. Here's what economists and business writers have to say:
- Look at the Bright Side, muses the Economist's Free Exchange blog: "This is a much happier state of affairs than is likely to prevail a year from now, when families are struggling to hurry grandpa off this mortal coil by the time the ball drops in Times Square."
- The Estate Tax Rewards Value Generation, writes Half Sigma: "Taxes on value transference have the effect of encouraging value creation rather than discouraging it... a lucky heir might quit his value-creating job because he got rich through inheritence. Taxing the value transference (the inheritance) encourages value creation activities (the heir keeps his job)."
- Retain the Estate Tax, insists Chuck Collins at The Huffington Post: "Without the estate tax, we could lose almost $1 trillion in revenue during the next two decades. There only are three ways to fill that gap: cut spending, raise taxes on the middle class or - our current favorite - pile it onto the national debt. Instead of leaving prodigious amounts of debt for the next generation, we should retain a meaningful estate tax. During a time of war and economic crisis, the idea of further tax breaks for multi-millionaires and billionaires is unseemly and unfair."
- "2010 Trendwatch!" John Cook at Gawker, writes: "Nothing staves off the allure of death's sweet and final embrace like the prospect of your heirs retaining an additional 45% of your estate above $3.5 million. Conversely, nothing rushes you into the arms of eternity like a looming tax hike...2010 Trendwatch! Lots of money-obsessed assholes will die next year. That's a good thing, right?"
- This Is Not a Big Deal, writes Derek Thompson at The Atlantic: "This is a perfect example of a molehill transformed by political voodoo into a mountain. According to the article, the tax applies to about 5,500 taxpayers a year. That number is not large! And yet the attention that attends the 'death' tax is."