While there’s been some discussion of the massive cut, albeit temporary, in the estate tax (arguably the tax cut least likely to produce jobs), the new gift tax rules are even more obscene:
Families would be able to make tax- free gifts to their children or others of as much as $10 million, an increase from the current limit of $2 million, under the tax-cut bill Congress is debating this week.
Beginning in 2011, an individual U.S. taxpayer’s lifetime gift-tax exclusion will jump to $5 million, up from $1 million currently, according to the legislation. Gifts from living parents allow taxpayers to transfer assets such as cash, stocks or shares of a business to their kids and let the value grow outside of the couple’s estate, said Jim Cundiff, an estate planning attorney with McDermott Will & Emery, who’s based in Chicago. Unifying the estate and gift tax exemptions is one of the biggest benefits in the measure, he said.
But you better move quickly:
“You could transfer $10 million next year without paying any tax,” Cundiff said. “That’s a big tax-free gift. This benefit evaporates in two years, so take it while you can.” Parents may use trusts to give the money to descendants if they’re concerned about giving a lot of money directly to their children, he said.
It’s one thing to be born with a silver spoon in your mouth, it’s another to have one stuck up your ass. This is nothing more than an end-run around the estate tax. The kids didn’t earn it, they inherited it–and keep in mind, the previous rules allowed $2 million tax free, after which the remaining gift is treated as income and currently taxed at thirty five percent. You can make do on that.
This is one more step towards the establishment of a de facto aristocracy and towards the triumph of Toryism (Republicans should really be called Tories–it would clear things up greatly). Apparently, working for a living only has redemptive value for poor single minority mothers: the scions of the wealthy, by virtue of their birth, clearly don’t need this form of moral instruction.
A republic, if we can keep it…