Death and Taxes

I love the easy topics! I explore death at http://www.perfectpassings.com/. Check in if you anticipate that you might 'shed your mortal coil', but if you're here to stay, don't bother!

Taxes, wow, so much misinformation on this topic. Cable news delivers a pre packaged opinion containing very few facts and the local news, well, not much going on there either.

When we talk about these tax 'rates' we feel like they are real. But we are one of the few countries that have a 'tax code' and it is highly manipulated by Congress. Change the tax rates and then pass a new tax regulation that negates the effects. The tax rates only apply AFTER a corporation or individual has fiddled with deductions, so the real margin is very fluid. And what you end up with is an 'effective rate' vs. the published rate. But the explanation doesn't make good news bytes and the CPA's lobbyists love those tax code changes. Here's an interesting publication from 2004 from the GAO. www.gao.gov/new.items/d051009sp/pdf

So a complete redo of the tax code might be simpler. Also, having to pay taxes right off the top might help America return to a 'build and earn' model, rather than a 'quickie get rich quick' model that doesn't really contribute to the social structure. ( I think that the stories of overnight billionaires is demoralizing our young people, but that's another story.)

A simple straightforward tax might also limit corporate crime. If the tax code was simple and violations easy to catch, a CEO might think twice about cooking the books. We have too many loopholes, dark corners and sneaky accounting tricks to make the tax rates even meaningful.

On the macabre side, this is the last month you can pass out of this world with limited tax consequences. When Yankees owner George Steinbrenner died on July 13, 2010 just months after the estate tax expired, he saved his heirs a possible $500 million in taxes. Hospital wards will be contentious places this New Year's Eve.

So this month , death and taxes are going to be a potent brew.

Talk to me, log in to http://www.perfectpassings.com/ and tell me how your family plans for the afterlife. One client has an annual family meeting once a year, outlining expectations and the responsibilities of each family member going forward. Brilliant family they are.
Or talk to me here on Real Estate matters! Love hearing from you.
Seasons Greetings,
Terry