In what can only be described as extreme negligence, our Congress has quite literally given some people the incentive to kill themselves! At the beginning of 2010, Congress let the estate tax (sometimes called the death tax) lapse. So whereas in 2009, if a wealthy person died, he would owe 45% of his assets to the government, in 2010, that percentage dropped a little… down to 0%.
Unfortunately for people who aren’t quite ready to kick the bucket, that tax comes back with a fury in 2011. As The Wall Street Journal reports:
Not only will the top rate jump to 55%, but the exemption will shrink from $3.5 million per individual in 2009 to just $1 million in 2011, potentially affecting eight times as many taxpayers. The math is ugly: On a $5 million estate, the tax consequence of dying a minute after midnight on Jan. 1, 2011 rather than two minutes earlier could be more than $2 million; on a $15 million estate, the difference could be about $8 million.
The article then quotes Eugene Sukup, the founder of Sukup Manufacturing, saying “You don’t know whether to commit suicide or just go on living and working.” Indeed, if one of the major reasons to accumulate wealth is to pass it on to one’s children, at this point, the rational thing to do would be to prematurely end one’s own life. What a perverse and disgusting incentive!
Well obviously Congress will get something done by the end of the year… right? Maybe not:
Many Washington insiders are betting Congress won’t act this year because of an overflowing to-do list, the fall election and fewer than 40 working days left in 2010. At least one near-deal has failed the Senate this year.
This could bring a wave of suicides and spawn a large increase in what some call “suicide tourism.” Basically, terminally ill people go to countries with right-to-die laws so they can end their own life. Switzerland even extends this offer to foreigners. And other than suicide, we may have more restless, spoiled heirs-to–be “quickening the process” to get their inheritance. Even without such awful incentives, that kind of thing happens from time to time (see here and here).
Either way, I had previously believed Congress’ incompetence could not get any worse. I was wrong.