New PlainTalk Planning Article "The Estate Tax: Why to Keep and How to Fix"

Online, June 26, 2012 (Newswire.com) - PlainTalk Planning has released a new article on the potential fate of the federal estate tax, the push of many to abolish the tax, the automatic changes that are slated to take effect in 2013, and the unavoidable, rapidly approaching showdown in Congress. The article is entitled "The Estate Tax: Why to Keep and How to Fix." The author is Professor Dwight Drake of the University of Washington School of Law.

In the article, Professor Drake reviews the respective arguments for keeping and jettisoning the tax, the associated revenue impacts, and four potential scenarios. Drake favors retaining the tax and proposes a seven-point "smart fix" of the tax.

"With this tax, it's not about the size of the numbers," writes Drake. "It's about perceptions, priorities and opportunity costs...Any serious efforts to kill the tax must be advanced by those who, out of the other side of their mouths, advocate for strong measures to restore financial discipline and hope - senior entitlement reforms, spending caps, fewer entitlements, a plan for a balanced budget, and more. And that's the rub. Why should any fiscal discipline advocate consider wasting even a smidgen of precious political capital trying to kill a 95-year old tax that impacts only the rich? Given the unprecedented fiscal challenges we now face, we just can't afford a knock-down fight over a tax break for the rich that will trigger serious perceptions problems, evidence messed up priorities, and ultimately result in huge opportunity costs."

Drake's proposed fix of the tax includes a special exemption for family-owned businesses and farms, no estate or gift tax on the first $3.5 million ($7 million for a married couple), a maximum rate of 35 percent, and the elimination of four major loopholes. Drake concludes that these changes would "soften the impact on family-owned businesses and farms, eliminate loopholes that create big tax advantages for those who have the know-how and means to exploit them, and buttress (not frustrate) a broader fiscal discipline agenda."

The full article is available at www.plaintalkplanning.com.