Creative Lying at The Atlantic
Michael Kinsley published an article on the Estate Tax yesterday. His final sentence certainly gives us his mindset: "Obviously, though, a rate of zero is insufficient."
Well, then. Let's look at a bit of his facts.
In 2001, before the Bush tax cut, a married couple could pass on $1.35 million tax-free--plus ...And just how would they do that? Well they would simply insure that all their assets were divided neatly into two piles, one in each of their names and each pile totaled exactly $675,000. Then, they each need a will that passes along all of their pile to their designated heirs. Simple, yes?
How often do you re-juggle the piles? Each time the market rises? And Dad's stamp collection? And mom's jewelry?
O, and if the one with the home in their pile inconveniently dies first, do the heirs just sell and divide and have the sheriff evict the other parent?
My, real life is more complicated than Kinsley knows isn't it? Face it, no couple could pass on $1.3 million to their heirs tax free without all of their assets in cash in two bank accounts.
These kinds of problems came into play at levels well below total assets of $1.3 million. More than $675,000 but not much more. And just how huge a home did one have to own in California in 2001 before its value alone exceeded $675,000 and put people in this position? The San Francisco Bay Area had a median home price of $484,000.
And why is a zero rate insufficient? Because Kinsley has need of the money for better purposes than Joe the Plumber's children?