Change in Washington D.C. means change will eventually trickle down to all of us, especially when that change has to do with taxes. In preparation for that change, Dean Zerbe of Forbes.com has provided us with a review of President Obama’s tax proposals. According to Zerbe, Obama’s proposals contain (as Clint Eastwood would say) the good, the bad, and the ugly.
Our clients will be pleased to hear that the proposed estate tax falls in “the good” category. Or as good as can be expected, anyway. As I discussed during our Annual Client Event last December, we knew Obama’s proposed estate tax is not going to cause anybody to jump for joy, but it definitely could have been worse.
“Estate tax. The administration proposed making permanent this year's estate tax law, which exempts $3.5 million of each estate from tax. This may not be what some small-business owners wished for. After all, under President Bush's tax cuts the estate tax was supposedly going to disappear next year–for one year. But it could have been worse; in 2011, under current law, the estate tax exemption would have reverted to $1 million. Moreover, having certainty is of great importance for family planning and peace of mind.”
Unfortunately, Obama’s proposals for income tax and the issues surrounding it will not be as pleasing to everybody as his estate tax proposals may be. The silver lining is that as of yet, these proposals are just that—proposals, and not all of them will actually come to pass. Keep the lines of communication open with your accountant and financial planner, and of course keep reading our blog, to stay informed in the months ahead.