Federal Estate Tax – Worst Case Scenario More Likely
Based on inside sources in the U.S. Senate, here’s a prediction about what will happen with the estate tax. Since health care reform has consumed Congress and the Obama administration (except for drinking beer with professors and policemen), there will likely be no action on the estate tax until late December. At that time, with a cash-hungry government facing a year with no estate tax whatsoever, Congress will institute a one-year patch extending the current $3.5 million exemption through 2010. Then, in 2011, the exemption will drop to $1 million (with no action from Congress necessary). This, in addition to the coming increases in income taxes, will help pay for health care reform and all the other hemorrhaging of taxpayers’ money. Bad for taxpayers, but a boon for tax planning professionals. We’ll see…
