For many of us, the documented proof that billionaires often don’t pay any taxes was a source of pride and rage. Mostly disgust and rage to get confirmation that most of us pay more in taxes — both in percent of income and in total dollars — than many, if not most of the nation’s billionaires. So if they don’t pay any taxes, who does? Who keeps Uncle Sam afloat and pays for all those projected projects elected officials approve so they can remain in office? A lot of that money comes from estate taxes that impact many of our families when our estates are distributed. And if you work for the government and/or retired from it, you almost certainly have an estate. And it is probably more extensive than you think. Which is why just about everybody should be aware of both current tax laws and pending proposals from the White House and other sources.
The chances of meaningful tax “reform” — as it would help you — are slim to none this year. Or next. Or the year after that. Too many people — accountants, lawyers, auditors, planners and lobbyists — depend on the complexity of our tax code for a living. The imposition of a flat tax, or one with several brackets and no limit, would put them out of work. Even if you are a cockeyed optimist, it is best to plan for the status quo for the foreseeable future. And for you to pay more taxes in the next few years than Warren Buffet, Bill Gates, and Jeff Bezos. But significant change is possible.
Changing estate tax rules and laws need to be understood, and if necessarily, dealt with, if you want your estate handled the way it should be handled. And that means being aware of what Congress and the White House have in mind to make major changes in estate tax laws. Changes that could leave your family with a much bigger tax debt in the future. The proposals are almost always labeled as “reforms”, a key to you to cover your assets.
For an update on estates and estate tax law —- current and proposed — I asked Tom O’Rourke to join me at 10 a.m. EDT today. He’s a well-known Washington attorney specializing in taxes and estates. If you have questions, please send them to me before showtime at mcausey@federalnewsnetwork.com. He sent us this preview of what he’ll be talking about and why you should hear it:
“A number of proposed changes to the tax laws have been introduced in Congress. Senator Sanders has introduced the “For the 99.5% Act” that could significantly reduce the estate tax exemption. The President has also proposed several major changes in the tax laws. These changes could affect the income and estate tax planning strategies of federal employees and retirees.
While taxes certainly have an impact on all of us, they should not be the primary consideration in any estate plan. Rather, the most important goal is to make sure that you have a plan in place that protects you and your loved ones. At a minimum, all individuals need a basic estate plan that includes an advance medical directive, a personal financial power of attorney, and a will and/or a trust. Once this basic plan is in place, it can be refined to allow you to minimize tax liability.”
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