Time for Permanent Estate Tax Reform

Jeffrey A. Cooper

Quinnipiac University School of Law

September 1, 2012

University of Missouri-Kansas City Law Review, Vol. 81, No. 2, 2012

On January 1, 2013, the federal estate tax regime in effect from 2001 to 2012 is scheduled to revert to its pre-2001 structure. A 35% rate will soar to a 55% rate. A $5 million exemption will plummet to $1 million. Some deductions and credits enacted in 2001 will disappear while others repealed in that year suddenly will reappear. In fundamental ways, the estate tax in effect on inauguration day will bear little resemblance to the tax as it existed on election day.

Regardless of one’s personal politics, there is little redeeming to be found in such dramatic shifts in tax policy. In the next four years, preferably in the next four months, Congress and the President must work together to implement their own vision for the estate tax, rather than allowing mere inertia to effectuate choices made by their predecessors. I offer this essay as a modest contribution to that effort.

This paper is organized in two major parts. In Part I, I explore the recent history of the federal estate tax, highlighting how changes made in the last dozen years have brought Congress to a moment of crisis. In Part II, I offer a suggestion for permanent reform of two provisions of the current estate tax regime: enacting a permanent estate tax exemption of $3.5 million to $5 million and restoring the state death tax credit.

Number of Pages in PDF File: 14

Keywords: estate tax, gift tax, state death tax credit, EGTRRA, Obama, Congress, state estate tax, tax policy, wealth transfer

JEL Classification: H2, H20, H21, H22, H23, H24, H26, H29, H7, H70, H71, H72, H73, J14, K34

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Date posted: September 12, 2012 ; Last revised: February 19, 2014

Suggested Citation

Cooper, Jeffrey A., Time for Permanent Estate Tax Reform (September 1, 2012). University of Missouri-Kansas City Law Review, Vol. 81, No. 2, 2012. Available at SSRN: http://ssrn.com/abstract=2144942

Contact Information

Jeffrey A. Cooper (Contact Author)
Quinnipiac University School of Law ( email )
275 Mt. Carmel Ave.
Hamden, CT 06518
United States
203-582-3731 (Phone)
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