Back in 2010, to get a nuclear proliferation treaty passed, President Barack Obama negotiated an increase in the Estate exemption to five million dollars. Two years later, the amounts were finalized into law and is now indexed. The “stupidity tax” portion of this law is no longer accidental, as he average American will no longer cross this threshold just by owning a house and life insurance, like they would have 10 years ago, Thus the tax has another benefit, it curbs people’s investments and forces thinking.
Let’s face it, to be charitable and forward thinking, sometimes there needs to be an external force. The Estate Tax, is that force. The President Elect and the Congress, have discussed abolishing the Estate Tax all together. This would be bad. Since 1900, the Estate Tax has undergone over 28 different changes, including abolishment and reinstatement, twice. However, it has always stuck around in some capacity. In addition, I am only discussing the Federal Tax, as most States have their own version and they all vary. In the Federal Version, abolishing the tax will be bad, as at some point, Congress will reinstate it, and those that could have planned twenty-five years earlier will be caught holding the bag and they will pay a high tax just for following the law, but by keeping it, everyone will plan and think about it, and make sure that all advantages are utilized properly.
By this proper planning, charities will benefit. Without charitable deductions, people do not contribute at the same rate as with deductions. It is the same at the upper echelon. While they are more generous with their money no matter what, the charitable deductions for them at a high level are helpful and helps maintain their legacy and their power for generations. Let’s face it, most people at that level want their name to live on if possible, that is why different families create foundation, Rockefeller, Kennedy, Carnegie, Vanderbilt, even Clinton, so that they can live on in eternity.
Thus, eliminating the tax could harm the projects we need to funded to better or country and globe, and might harm the economy, I mean all those lawyers and advisors would be out of a job as well, right?
Rodney Mogen, is the president of solveurpuzzles, a business focused company. Solve ur puzzles helps three groups: Small Businesses, Financial Advisors/Agents (fixed business only), and Local Government Entities. Rodney is also a small business coach focused on developing strategies for small business owners and helping them develop their own strategy and ideas to grow, sell, develop the way they want. He is focused on creating proper strategies for Advisors and business owners to assist them in their day to day duties by solving their puzzles.