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Thursday, June 29, 2006
Recommended Estate Tax Reading
Floyd Norris writes an excellent Op-Ed in today’s New York Times. His piece is one of the better introduction’s to the most recent incarnation of estate tax repeal. He walks us through some of the more technical aspects of the bill and how they will impact charitable giving. Norris also explains how some provisions might actually increase estate tax liabilities for some individuals living in states with estate tax, prompting those states to lower their taxes to avoid an exodus of wealth.
Charities now get billions of dollars in bequests from estates each year. How much of that money flows from generosity, and how much from a desire to reduce taxes, is impossible to know. But in 2004, 47 percent of estates of more than $10 million that were required to pay taxes had at least some charitable contributions, in contrast to just 22 percent of such estates that escaped taxation.
With higher exemptions, it seems likely that the level of donations from estates could fall sharply. For those with no estate tax liability, tax advisers would be likely to recommend that any giving be done before death, when there would be a deduction that could reduce income taxes.
Read the whole thing for good explanation of the ins and outs of the estate tax "compromise".
New York Times: Estate Tax Bill Could Hurt Charities
Posted by Craig Jennings
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