The Bells Have Began Tolling For The Exemption To The Estate Tax

[caption id="" align="alignleft" width="240" caption="Estate tax has long since been a controversial issue in the U.S.; photo credit: Gold Beach Real Estate"][/caption]

It has been part of the public discourse for some time now; Republicans, for the most part, saw fit to enact an exemption to the much maligned estate tax.

This Estate Tax refers to the scenario where, before the exemption, if someone of means died, a little over half of his or her estate (55%) would have gone to the coffers of the government in taxes.

It is said that Yankees owner George Steinbrenner's timing was perfect: not only did he lived a long life, but he gave the ghost in the nick of time, saving his heirs millions.

In 2011, the exemption for the Estate Tax is coming to an end, and President Obama and his Democratic colleagues in the House and the Senate have pledged that they will not renew the exemption – barring that the Democrats do not lose the House and the Senate in the coming mid-term elections. And in a time when the Treasury is empty, perhaps, even Republicans might compromise on the Estate Tax.

According to the Wall Street Journal, heirs and taxpayers must understand the genesis of this dilemma . This Estate Tax debate has it roots in politics, and the changes go back to 2001, when Congress cut the estate tax rate to 45% from 55% and increased the exemption gradually over a decade. From its 2001 level of $675,000, the exemption rose to some $3.5 million per individual by 2009.

In some way, this debate is an off-shoot of the raging debate over one aspect of  Liberation Theology, where some argue and advocate that the government has a right to take more of the means of the rich and give them to the poor, while others, like me, believe that kind of thinking is a perversion, and that any largess from those who are wealthy must be voluntary.

To my friends who use the Gospels to posit such a perversion, tell me where Jesus or the Apostle Paul commanded that the rich should be forced to give?

Those who are elderly and wealthy and want to leave the bulk of their estate to their heirs must now pray that exemption remains. I hope the heirs and the elderly wealthy do not resort to nefarious means to save money before the deadline.