On August 2, 2011, the Joint Select Committee on Deficit Reduction, simply referred to as the "Super Committee" or "Super Congress," was created under the provisions of the Budget Control Act of 2011. The Budget Control Act states that "The goal of the joint committee shall be to reduce the deficit by at least $1.5 trillion over the period of fiscal years 2012 to 2021." The Super Committee is tasked with making recommendations to achieve this goal to the full Congress on or before November 23, 2011.
With November 23 fast approaching, there has been a lot of speculation about what the Super Committee will recommend. One rumor is that the Committee will push for rolling back the lifetime gift tax exemption from the current $5 million limit back down to $1 million (which was the exemption in effect from 2002 through 2010), and another speculates that the Committee will push for reduction of the estate tax exemption from $5 million to $3.5 million (which was the exemption in effect in 2009). According to the speculators, these changes could be implemented as early as January 1, 2012.
I started hearing these rumors about two weeks ago and since then I have not found any credible evidence that these changes will actually be proposed. But the theory goes that since these changes are a distinct possibility, the time is now to make use of the $5 million lifetime gift tax exemption, which under current law is set to increase to $5.12 million on January 1, 2012 and decrease to $1 million on January 1, 2013. As I see it, while these rumors probably won't push many into acting now because those who have enough wealth to take advantage of the $4 million increase in the lifetime gift tax exemption most likely implemented their plans a while ago, for those of you who may be on the fence, there's no time like the present.
- Super Committee May Target Gift Tax For Deficit Reduction
- Estate Planning In View Of Possible Tax Law Changes
- "Super Committee" Looks at Past Debt Proposals
- What is the Lifetime Exemption From Gift Taxes?
- Lifetime Exemption From Gift Taxes: 1997 - 2013
- Overview of Current Federal Estate Tax Laws
- Exemption From Federal Estate Taxes: 1997 - 2013
There is another possibility. With everyone debating rates and exemption amounts, there is another idea floating around on capitol hill to change how the Estate Tax is collected completely. It’s being looked at by members of Ways & Means in the House and members of the Senate Finance Committee at the same time. Some say even members of the Super Committee have been briefed on it, but since they’re keeping a tight ship, we don’t know for sure.
The estate tax only represents 1% of the total revenue to the Treasury – because none of the rich people ever really pay it. They sell out and hide assets in trusts – taking them out of the economy.
The ASSET-Tax.org plan actually leaves the assets in play, creating more economic growth, but the treasury takes no risk of the loss of revenue – it’s a revenue neutral proposal initially, with an upside. It’s changing the debate.
http://www.SimplifyEstateTax.org