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"The idea of the government reaching into the grave and grabbing 37 percent to 60 percent of the wealth accumulated during a lifetime is ghoulish to many." - Owen Ullmann

The above quote is the beginning of an eye-opening article entitled "Night of the Living Death Tax" by Dennis Constant of NTUI.org. Dennis Constant is Research Director of the Illinois Taxpayer Education Foundation. Here's the rest of the article:

"In 2001, Congress passed President George W. Bush's 10-year, $1.35 trillion tax cut, which included a steady reduction in the estate tax, widely known as the 'death tax.'

The amount excluded from the tax man's long, bony fingers was increased from $1 million to $3.5 million in 2009. Above the $3.5 million threshold, the tax rate on inheritances slowly decreased from 55% to 45%. In 2010, the estate tax disappears altogether.

But like a B-movie killer, the estate tax will return in 2011 just as strong as before. The rate is scheduled to shoot back up to 55% on the portion of estates over $1 million. Although it's likely that Congress will extend the 2009 rate and exemption level to avoid the stigma of raising taxes, there is little talk of ending this grave-robbing once and for all.

The federal estate tax was first imposed on a temporary basis in 1797 to fund an anticipated naval battle with France. It was re-imposed in 1862 to help finance the War Between the States, and again re-imposed in 1898 to help pay for the Spanish-American War. The tax became permanent in 1916 to help finance World War I and has been with us ever since-the death tax that refuses to die.

We are used to politicians taxing us to death. The least they can do is allow us to rest in peace."

As mentioned in one of my previous daily posts, the difference between dying on December 31, 2010 and January 1, 2011 can mean as much as a whopping 55 percent of your estate going to Uncle Sam.

That's a pretty hefty "death tax."

- Ed Smith, Publisher
The EHS Letter Manual