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<http://www.boston.com/bostonglobe/editorial_opinion/editorials>Globe Editorial The Boston Globe <http://www.boston.com/news/globe/> As estate tax drops to zero, Congress should take action January 1, 2010 E-mail this article To: Invalid E-mail address Add a personal message:/(80 character limit)/ Your E-mail: Invalid E-mail address Sending your article Your article has been sent. * E-mail <javascript:void(0)>| * Print <http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/01/01/as_estate_tax_drops_to_zero_congress_should_take_action?mode=PF>| * Reprints <http://reprints.bostonglobe.com/>| * Yahoo! Buzz <http://buzz.yahoo.com/buzz?publisherurn=bostoncom751&guid=http%3A%2F%2Fwww.boston.com%2Fbostonglobe%2Feditorial_opinion%2Feditorials%2Farticles%2F2010%2F01%2F01%2Fas_estate_tax_drops_to_zero_congress_should_take_action%2F>| * ShareThis <javascript:void(0)> Text size -- + THE RICH and ailing might want to post guards outside their hospital doors this year. Thanks to a provision of the Bush tax cuts, the tax on inherited estates will phase out completely in 2010 before springing back to life in 2011 at its old, higher levels. This means that the rich could save their families millions or more by dying in 2010. <http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/01/01/as_estate_tax_drops_to_zero_congress_should_take_action/?comments=all> Discuss COMMENTS (64) <http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/01/01/as_estate_tax_drops_to_zero_congress_should_take_action/?comments=all> Congress needs to fix this loophole by acting quickly to bring back the estate tax at a reasonable enough level to reduce the deficit without reaching into the pockets of those who are less able to shoulder the burden. It didn't have to happen - Congress could have patched up the hole at any point during the last 8 1/2 years. Now, if it doesn't apply a 2010 tax retroactively, it will lose out on a levy that brought in $26.5 billion in 2008. The expiration could also hit many small businesses and family farms that might otherwise pay nothing, since the Bush cut coupled the elimination of the estate tax with an expansion of the capital gains tax on inherited property. The House passed a measure to maintain the cuts at the 2009 level, permanently setting a tax of 45 percent on estates valued at $3.5 million or more for an individual or $7 million or more for married couple. But the Senate, delayed in part by its focus on health insurance reform and in part by Republican objections, hasn't acted. When the Senate takes up this issue, it should depart from the House bill and instead seek a compromise between the pre-2001 and 2009 levels. One promising proposal is Representative Jim McDermott's Sensible Estate Tax Act, which hasn't gotten the attention it deserves. The act would set the exemption rates at $2 million per individual and $4 million per couple and index those levels to inflation. Rates would range from 45 percent to 55 percent, based on the value of the estate. The bill would also smooth out confusing state-based differences in estate tax law. Some opponents claim that a retroactive tax could be unconstitutional, but legal precedents suggest otherwise. Since any plan passed by Congress would be the extension of an existing tax rather than an entirely new one, it would likely pass muster. All of this would ensure that the burden of the estate tax falls on those inheriting large amounts of money from very rich benefactors - and that aging moguls don't have to panic this year. © Copyright 2009 Globe Newspaper Company. READER COMMENTS » View reader comments (64) » <http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/01/01/as_estate_tax_drops_to_zero_congress_should_take_action/?comments=all> Comment on this story » <http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/01/01/as_estate_tax_drops_to_zero_congress_should_take_action/?comments=all#addComm> http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/01/01/as_estate_tax_drops_to_zero_congress_should_take_action/ -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
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