Anxiety over Indeterminate Future of Estate Tax Is on the Rise

Earlier on this blog, I discussed the uncertainty associated with the amount of exemption and the tax rate that will be applicable to non-exempt estates in the upcoming years.

According to Rebecca Knight, Facing up to the two certainties in life, FT.com, Oct. 23, 2007, this uncertainty has caused many Americans to experience an increased level of anxiety. Knight reports:

The survey, carried out by The Hartford Financial Services Group, found that most affluent Americans - particularly those with more than $2m in net worth - say they are more concerned than they were a year ago about their families having to surrender significant chunks of an estate to federal taxes.* * *

The top federal estate-tax rate on the biggest estates is 45 per cent until 2009, and will increase to 55 per cent in 2011.* * *

Compared with the sample average of 49 per cent that expressed greater concern about the estate tax, 73 per cent of Americans with $5m or more in assets, and 56 per cent of Americans with more than $2m in assets, said that their fears were increasing, the survey found.

The greatest concerns over the estate tax were: the respondents' increase in their net worth; the growing federal budget deficit that might imperil any estate tax cuts; and their sense that the new Congress is less likely to repeal or reform the tax.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.