| For 10 years the estate tax was set in law to be | | | | what should be done for years following 2010. The |
| abolished in 2010. If congress didn't act to keep it | | | | reversion to the 2000 law was just to leave an estate |
| abolished or modify it for 2011 and beyond, then the | | | | tax law in place for abolishment or modification. |
| 2011 estate tax would just revert to that of 2000. Now | | | | But for 10 years, the legislature has done nothing about |
| congress is considering retroactively imposing an | | | | estate tax laws beyond 2010. This is a disgrace in |
| estate tax for 2010 later in 2010. This article updates | | | | itself. That's because estate taxes can rob a wealthy |
| you on the present rates and explains that this | | | | estate of up to half its value. And it takes several |
| retroactive change is unconstitutional. | | | | years - and often far more - to put effective estate |
| Just so you know, there's no estate tax and | | | | planning into effect. And now, well into 2010, legislators |
| generation skipping (GST) tax in 2010 by law. Since | | | | are considering retroactively changing the 2010 estate |
| estate, GST, and lifetime gift taxes generally tax value | | | | law. |
| above an exemption amount, we can say that the | | | | There's no justification of retroactively changing the |
| 2010 estate, GST, and lifetime gift taxes have | | | | 2010 law not only because the original intent of the law |
| exemption levels of unlimited, unlimited, and $1 million, | | | | is consistent with its operation, but there are reasons |
| respectively. The value of gifts beyond the $1 million | | | | that changing it may possibly serve improper motives |
| exemption level is taxed at up to 35%. | | | | (an issue brought up in the Supreme Court case law |
| Without congressional action, the 2011 estate, GST, and | | | | above) of congressman. |
| lifetime gift taxes exemption levels will go to $1 million, | | | | Motives - proper or not - may be associated with |
| $1 million (including lifetime gift), and $1 million | | | | contribution money to their election campaigns from |
| respectively. The top rates of each of these are 55%. | | | | special interest groups who seek influence on how the |
| But that's all liable to change either before 2011 turns | | | | laws should be changed. Laws that require imminent |
| the corner of after. | | | | action frantically draw special interests to donate that |
| Changing 2010 taxes retroactively should be | | | | much more. The more congress can keep the carrot |
| considered unconstitutional | | | | dangling, the more campaign contributions which may |
| Congress in its audacity may change the 2010 estate | | | | be forthcoming. Clearly, congress has created this |
| tax laws late 2010 retroactively to Jan 1, 2010. Some | | | | circumstance by their own inaction. |
| consider this retroactive change constitutional. They | | | | If you recognize the unconstitutionality of this |
| cite Supreme Court case law in U.S. vs Carlton (1994) | | | | retroactive change in the 2010 estate law, you ought |
| that deals with a complicated estate tax deduction for | | | | not to support any congressman who votes for it. The |
| an ESOP transaction. A retroactive law affecting this | | | | unconstitutionality of retroactive laws should be |
| situation was upheld by the court to maintain the intent | | | | obvious to them - not to mention the average citizen. |
| of the original law - and that no improper motive for | | | | Trying to pass such laws undermines justice and |
| upholding the retroactive law was found. | | | | fairness - no matter what reason they proffer. Proper |
| But, the operation of the 2010 estate tax law reflects | | | | or improper motives for passing retroactive laws may |
| no mistaken intent of those who fashioned and | | | | reap them benefits - but it'll be at the expense of the |
| passed that law. The clear intent of the law was to do | | | | citizenry - even if it's later overturned by the Supreme |
| away with estate tax. It left it to legislators to review | | | | Court. |