(Hartford Courant)- For the first time since 1916, wealthy people who die can leave an unlimited amount to their children or grandchildren without the IRS's taking its piece. The 2010 hiatus from the federal tax — a quirk that no one ever expected would happen — could last all year, if Congress doesn't act on it. Or, the temporary death of the "death" tax could be a mirage, if lawmakers slap a levy on estates retroactive to Jan. 1 of this year.
The outcome is anyone's guess. For now, the federal estate tax — scheduled to return at a high level in 2011 — is a confusing morass affecting thousands of families with multimillion-dollar estates. It also stands at the heart of a broader debate about how government should raise money. That's nowhere sharper than in Connecticut, the nation's richest state, with many families with fortunes to protect, but also among the most liberal, with wealthy residents who say the tax is fair. In 2009 and into this year, the state's estate tax has been a political football in the contest over how to balance an out-of-whack budget. - complete article
But what's happened to the federal tax has taken political gridlock to new heights.
"No one would argue it's best to go from 45 percent to zero to 55 percent, and yet that's what we're doing," said Ben Harris, a senior researcher at the Brookings Institution, a Washington think tank.
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