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Estate Tax

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Presentation I created for my Introduction to Business class on The Estate Tax – PowerPoint PPT presentation

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Title: Estate Tax


1
The Estate Tax
2
(No Transcript)
3
Introduction
  • The Estate Tax
  • The Gift Tax
  • The Generation Skipping Tax
  • i.e John D. Rockefeller

4
Pros
  • Strengthens Federal tax system
  • Provides backstop to the individual income
  • Of the small amount of estates that are taxable,
    almost none of small businesses
  • Under 2009 law only 100 small businesses and
    family farms would owe any estate tax
  • 99.8 of estates will never owe estate tax

5
Cons
  • Discourages savings
  • Estates were already subject to income tax
  • Death is an inappropriate time to tax
  • Burden to family businesses

6
Estate Planning
  • Many estate tax horror stories we hear are the
    result of poor or no estate planning
  • Two basic goals in estate planning
  • Avoiding probate
  • Reducing various types of taxes as much as
    possible

7
Who is affected
  • Less than 1.4 of the population
  • Only 100 small businesses and small farms in the
    whole country
  • Estate tax is scheduled to be abolished next year
    due to the Bush Administration
  • To be reinstated by Obama at a 45 rate on
    estates worth more than 3.5 million ( 7 mill for
    married couples)

8
  • Senate is trying to pass a 10 million exclusion
    at a 35 rate.
  • Under current law it is projected there would be
    6,160 taxable estates in 2011
  • The Tax Policy Center estimates lowering the tax
    to a 15 rate at 3.5 million exemption level can
    lose as much as 78 revenue.

9
Exceptions
  • Victims of Terrorism Tax Relief Act, signed by
    President Bush in January 2002, provides estate
    tax breaks for two groups of individuals
  • those who died from injuries caused by the
    September 11, 2001 or April 19, 1995 (Oklahoma
    City) terrorist attacks,
  • and those who died of illness caused by an
    anthrax attack occurring between September 11 and
    December 31, 2001.

10
Conclusion
  • Taxes have always been imposed on any economy as
    a way to redistribute wealth so one class of
    workers do not control the economy
  • The estate tax, along with the income tax helped
    to change the business mindset from amassing an
    empire, to making a living

11
Conclusion
  • In the end, the estate tax affects everyone
    because it has been an important source of
    federal revenue for nearly a century
  • It also encourages billions of dollars in
    charitable donations each year since donations
    greatly reduce the tax on large estates
  • affects only those most able to pay and the funds
    it raises are used to support a broad range of
    programs that benefit our country.

12
The End!
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