Late last night, Congress passed a compromise tax bill that will, among other things, cap the estate tax at 35% (with a $5 million exemption). If not for this compromise, the estate tax would have returned in 2011, at rates as high as 55 percent (with a $1 million exemption).
Hallelujah. Anytime you can save wealthy dead people millions of dollars during a time of crushing federal deficits, that’s something you just have to do. Way to go, Obama. When I voted for you in 2008, really I was just trying to vote for four more years of Bush’s ruinous fiscal policies.
Obama isn’t just saving money for all the dauphins eager to get their hands on their inheritances; he could be saving lives. Duke Law professor Richard Schmalbeck apparently thinks that rich old people might have killed themselves in droves over the next two weeks. Schmalbeck suggests that after spending a lifetime working hard and earning money, hundreds “or even a few thousand” of the aging rich might have committed suicide in the waning days of 2010, in order to pass on as much of their money to their children as they can before the estate tax returns in 2011.
I shudder to think that somebody would commodify their own life in such a way. But then again, I’m not rich. Maybe you only get rich in this country by being the kind of person who would gladly kill yourself if the price is right…
Honestly, when I first read Schmalbeck’s quotes on TaxProf Blog (via the ABA Journal), I thought: “This is the kind of thinking they use in terrorist-recruiting videos.” It’s a “you’re worth more dead than alive” approach that can only exist when you take the humanity out of human life.
Of course, Schmalbeck’s not endorsing this line of thought; he’s merely telling us what might be going through the minds of some people. Here’s what Schmalbeck wrote:
The concern is with the people whose deaths would naturally occur in 2011, but whose death can be accelerated if the individual is so inclined. There may actually be a few cases of tax-inspired murder by the decedent’s heirs, but the legal consequences of murder are severe enough that it is unlikely to happen with any frequency.
Rather, the concern is suicide. Many among the several thousand wealthy people who would die of natural causes in 2011 already know that that outcome is highly likely. They are the people suffering from stage four cancers, advanced congestive heart failure, and other terminal conditions. It is not fanciful to imagine that several hundred, or even a few thousand, people in this group will give serious consideration to ending their lives in ways that will benefit their heirs financially.
I predict with grim confidence that we will learn of many such stories if Congress doesn’t quickly act to alter the incentive structure. Not only is the premature loss of life lamentable, but so too is the loss of the millions, or even billions, of estate tax that can and should be collected from these very wealthy estates.
Here we go again. It’s just not rational to kill yourself. It goes against every natural instinct we have. I just struggle to fathom how people could kill themselves to save some money, even millions of dollars, in taxes.
And I say this as a person who is in favor of assisted suicide. If you are suffering, if you are terminally ill and in pain, if you’re a vegetable, I don’t think the state should prevent you from ending your own life. There are any number of situations I can contemplate in my own life where suicide would be the preferable option.
But money isn’t on that list of situations. I admit, I don’t even understand people who think money is that important. I don’t understand the kid who would want his parents to kill themselves in December so he could have some extra money, instead of dying in February and giving the kid a smaller bequest. You’re telling me that six extra weeks with your parents isn’t worth an extra million bucks? What are you going to do, teach your parrot to say “[Squawk], if you loved me you’d die already”? I don’t understand that.
We’re not even talking about parents who are considering nobly sacrificing themselves so their kids will have a chance. This isn’t Miss Saigon. We’re talking about estates worth over a million dollars (over $5 million under the compromise). Taking more for the government out of a seven-figure estate isn’t going to break anybody financially. The kids will be alright, regardless.
But again, I’m not rich, and at the end of the day this might be why. Money just isn’t that important to me. I do not view my own existence as an economic input. I don’t wake up in the morning thinking about how best to maximize my earning potential that day. I like money — at least, I like the things that money buys me — but it’s not the most important thing in the world to me.
Am I alone here? Shockingly, I guess we better do a poll.
If you were reasonably assured you would die in 2011, would you kill yourself in 2010 to avoid the estate tax?
- No. Taxes do not factor into the value I place on my own life. (54%, 260 Votes)
- It depends on how much money I have, how much my family would lose, yada yada probably. (32%, 156 Votes)
- Yes. Now please forward this article to my father. (14%, 69 Votes)
Total Voters: 485
Duke Law Prof Fears Suicides as Estate Tax Holiday Nears an End [ABA Journal]
Schmalbeck: With Tax Vote, Congress Will Have Blood on its Hands [Tax Prof Blog]
Congress Passes Tax Deal [Wall Street Journal]