quoted Caplin & Drysdale's President Beth Shapiro Kaufman
concerning the White House's "middle class economics" agenda to reboot estate taxes. For the full article, please visit POLITICO Pro's website
(subscription required). Excerpt taken from the article.
Since 2001, the number of returns paying what Republicans call the "death tax" has plummeted by 90 percent, according to IRS statistics. The 99-year old estate tax now raises so little money that customs duties are a bigger source of revenue to the Treasury.
"The real issue here is that we've excused so many people from the estate tax," said Beth Kaufman, a former Treasury official during the Clinton administration. "It doesn't seem preposterous to take the position that there ought to be some kind of tax when these assets pass from one generation to another."
The White House in its budget request due next week will allow a deduction for capital gains paid so the hit of the estate tax and the capital gains levy would be less than their combined rate of 68 percent.
The break on capital gains exists because lawmakers assumed inheritances would be already be dunned by the estate tax, Kaufman said.
"The theory behind having a stepped-up basis was that if an estate is paying the estate tax, then it's a nasty double hit," she said.