An Estate Tax challenge

[Demosthenes]

Tax Analysts Columnist David Cay Johnston Challenges You to Help Simplify the Estate Tax
Tax Analysts

Proposes Idea to Cut Paperwork, Scrap Need for Credit Shelter Trust FALLS CHURCH, Va., Oct. 13 /PRNewswire-USNewswire/ -- David Cay Johnston, the Tax Analysts columnist and Pulitzer Prize-winning journalist, proposes in this week's Tax Notes a way to greatly simplify the estate tax by eliminating forms and the need for shelters.
Rather than assume the current estate tax as a starting point, he writes, "What if we start from a different premise: The way married couples hold their money is no more the government's business than how they hold each other."
After outlining his idea, which involves a check-the-box feature on IRS Form 1040 for a person to check when his or her spouse dies, Johnston issued a challenge to Tax Notes readers:
"Critique this proposal in terms of how to make the law as simple as possible. Even if you favor eliminating the tax, take a hand at trying to figure out how to make compliance with a continuing estate tax as simple as possible."
If, he writes, readers can agree on ways to simplify the estate tax, two good things may happen: "First, Congress just might enact a simpler estate tax. Second, a lot of informed and bright minds could start working on how to do the same for the rest of the tax code."
To read Johnston's column, go to Tax Analysts' Web site at http://www.TaxAnalysts.com.

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[Investor]

If people knew what a small % of people actually owe any federal Estate Tax when they died, this topic would receive aproximately zero attention. At the current level of exemption ($3.5 million), and the unlimited exemption for marital transfers, I would be interested to see what % of US deaths result in a federal Estate Tax liability. My guess (and it is purely a guess) is that it is less than 1/4 of 1%.

EDIT: but I agree that simplification should be a goal of our legislators, when it comes to tax matters.

[Cpt Banjo]

At the current level of exemption ($3.5 million), and the unlimited exemption for marital transfers, I would be interested to see what % of US deaths result in a federal Estate Tax liability. My guess (and it is purely a guess) is that it is less than 1/4 of 1%.

It's a bit higher. For 2008, there were 17,172 estate tax returns filed involving a tax liability, representing about .7% of all US deaths.

[taxtales]

Of course in 2008, the exemption equivalent was either $2 or 2.5 Million. On another note, anyone see "Law and Order" last night. People were sending their cancer stricken rich parents to the quack oncologist so that they WOULD die in 2010. The Oncologist was referred to them by the evil tax lawyer. They didn't have the right ending though, it should have been that Congress retroactively repealed the repeal and these folks end up having to pay the estate tax anyway after killing off their parents.