We have talked previously about the uncertainty concerning the estate tax at the end of 2012. It gets even more uncertain because it is a Presidential election year and the two candidates have different proposals on estate and investment taxes. Today, we will look at the Republican candidate’s proposals.
The biggest change under Romney’s tax plan is the complete elimination of the estate tax. He also proposes dramatic changes to investment tax rates. Under the Romney plan, anyone with an income greater than $200,000, would pay a rate of 15% on capital gains, dividends and interest income. Anyone with an income below that threshold would pay no taxes on investment income.
Romney’s plan appears to be great for those wishing to grow wealth and leave it to their families. However, there is an issue with Romney’s plan as he proposes to pay for tax cuts by eliminating credits and deductions. He has not said which ones he will eliminate. That could mean that some people actually have to pay more in income tax every year than they do now, depending on which credits and deductions are eliminated.
Stephen A. Mendel, Estate Planning Attorney
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