Federal Estate Tax

Under the tax compromise agreement recently negotiated by President Obama and congressional Republicans, the federal estate tax exemption amount for 2011 will likely be $5,000,000, with any excess amount being taxed at 35%. This represents a massive increase on the $1 million exemption amount that was scheduled to kick in in 2011, and, in my opinion, is too high given the massive budget deficits the federal government is currently running. Increasing the exemption amount will have little, if any, stimulative effect on the economy. I am also concerned that, by allowing a married couple to potentially transfer up to $10 million tax-free to their children ($5 million per spouse), the government is encouraging increased disparity between wealthy elites (the top 1%) and the vast majority of Americans. Meanwhile, the cost of our government’s unrestrained borrowing from foreign lenders will have a long-term negative impact on our country. There continues to be an irrational disconnect between the professed concerns of both politicians and voters about excessive government debt, and the failure of the government to take any meaningful action to address the problem.