Democratic Proposals for Revenue Raising

Democratic Proposals for Revenue Raising


The proposal from the White House includes:

  • Income surcharge for high income earners - basically a 55 surtax on Adjusted Gross Income in excess of $500,000.
  • Repeal high-income tax cuts in 2012 as opposed to 2013.
  • Grantor Retained Annuity Trusts (GRATs) - minimum 10 year term for these trusts that are used to pass wealth on to younger family members at very little if any gift tax cost.
  • Materially reduce valuation discounts (minority interest and lack of marketability) for family controlled entities such as LLCs and Limited Partnerships.
  • Revert to 2009 estate tax parameters for 2012, which would mean a $3.5 million exemption and a 45% rate.  I assume spousal portability would go away.  The current $5 million exemption is scheduled to expire on December 31, 2012.  If Congress takes no action, the exemption will fall to $1 million and the rate will increase to 55%.

Gregory Herman-Giddens, JD, LLM, TEP, CFP, Attorney at Law (NC, FL, TN), Board Certified Specialist in Estate Planning and Probate Law (NC). North Carolina Registered Guardian, Solicitor, England and Wales. Follow his blog, North Carolina Estate Planning Blog..

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