I doubt Obama wants to go back to the Clinton Estate Tax, with a taxable estate of $600,000, that would end up taxing millions of middle-class homeowners who under no circumstances ought to be subjected to this tax.
$600,000 is not that much when a 1500 square foot home in S.F. might be worth $1 million. The person who owns that home isn't rich by any means. Going back to the pre-Bush 2001 exemption of $1 million is better, but still not sufficient.
I believe that about a $1.5 million exemption would be sufficient, but Congress is likely to make the exemption higher, perhaps as high as $3 million.
I wouldn't support that, but the cry will be "family farms and ranches!" And though it would be easy to exempt family farms and ranches being passed to family members it is likely that Congress will buy this swindle and increase the exemption amount.
Somewhere between $2 and $3 million is my guess as to what's likely.
Remember that a husband and wife are BOTH entitled to the exemption, so married couples can pass up to TWICE the exemption amount.
So, with a $2 million exemption (the 2008 exemption) a couple could pass up to $4 million tax free to anyone (by putting what's known as a "spousal trust" in their will).
That ought to be enough!
Posted by Cugel at November 8, 2008 09:04 PMBTW: A $2 million or even $3 million exemption would still capture the vast majority of the money taxed by the estate tax. Most is paid by a few extremely wealthy estates, and it's for these Billionaires (not even the millionaires) that the lobbying efforts were made to repeal the tax.
Republican lying supported by conservatives in the media convinced millions of Americans that THEY were subject to this tax or might likely be subject to it.
In reality, it will only ultimately affect people who can damn well afford good estate planning lawyers to deal with the tax issues raised.
Even if you are above the estate tax threshold, there are still LOTS of loop-holes available for the rich and super-rich: including Charitable Lead Trusts, and Charitable Remainder Trusts, 25503c trusts, and Life Insurance Trusts, Family Limited Partnerships and other advanced planning techniques.
In 6 years of practicing trusts and estates law, I've almost never needed any of these techniques. Most people just don't have enough money to justify using them. A simple $1.5 or $2 million exemption would prevent them from ever paying any tax (so long as they put a marital trust for their spouse in their wills).
Posted by Cugel at November 8, 2008 09:16 PMObama and Congress should seek a retroactive tax on the profits made by the various parties working the subprime deals. Retroactive civil laws are not per se unconstitutional. The constitution only bars ex post facto criminal laws. So far, the only persons escaping the focus regarding remedial work is that group of people who made a lot of money off subprime deals. Such legislation would be hugely popular, and, if nothing else, give some emotional comfort to those injured by the mess.
Posted by Robert in Austin Texas at November 9, 2008 10:35 AMObama has proposed extending the 2009 exemption - $3.5 million & a 45% rate. I don't think anybody expects a problem getting this passed.
Posted by Downpuppy at November 9, 2008 02:54 PM