George had a great post earlier about the sunsetting Bush tax cuts.  Here’s a breakdown
of the Estate and Gift Tax Credits and top Unified Tax Rates.  What’s good here is that estates are being indexed much like contributions to IRAs have been.  Thus as estates grow (until 2010) the exemption grows as well.  But in 2010, the exemptions drop back to the 02′ levels AND the taxes go up.  This will have serious implications for MANY folks beyond whom are considered traditionally wealthy.  Survivors of farm families and pensioners could be dramatically impacted unless Congress acts:

Year Max.
Estate Tax Credit 		Max.
Gift Tax Credit 		Max.
Unified Rate
2002 $1
million 		$1
million 		50%
2003 $1
million 		$1
million 		49%
2004 $1.5
million 		$1
million 		48%
2005 $1.5
million 		$1
million 		47%
2006 $2
million 		$1
million 		46%
2007 $2
million 		$1
million 		45%
2008 $2
million 		$1
million 		45%
2009 $3.5
million		 $1
million		 45%
2010 Tax
Repeal		 Tax
Repeal		 0%
2011 $1
million		 $1
million		 50%
2012 $1
million 		$1
million 		50%
2013 $1
million 		$1
million 		50%

 

Notice that the gift and estate taxes kind of drop off a bit and then there’s the magic year in 2010 and the the rates soar as the credit drops?  There will be a lot at stake in the 2008 election and odds are that these tax rates will be under discussion.  In the mean time, Kevorkian might be pretty busy in 2010.