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The study actually says: "We cannot rule out that what we have uncovered is not a “real” death elasticity, but instead ex post doctoring of the reported date of death to save on taxes." so they admit they have no evidence that their data isn't simply a reflection of people cheating on their taxes.
I think the simplier explanation is that people are simply cheating on the taxes by modifying the date of death. You really have to disprove that hypothesis before you can convince me that the much more unbelievable idea that any significant # of people cause themselves to die sooner or later to save on inheritance taxes.
I earned my wealth the old-fashioned way --- I worked my buns off, starting from zero --- my parents were dirt poor. I was the first in my family to graduate university, during which I continued working to supplement my partial scholarship.
I am WAY over the 3.5M exclusion. If I get a chance to reduce the amount of taxes my estate must pay, I certainly will --- to pass it on to my dearly beloved ex-wife and kids who helped and inspired me immensely during the decades we shared tight belts and tough decisions. Incidentally, none of my kids live anything like Paris Hilton, who should have been spanked silly by her idiot parents. However, I would like to protect my children against the day when a loaf of bread costs a thousand dollars and filling your gas tank costs a couple of hundred thousand. I earned the ability to give my kids that protection --- what are YOU doing to protect YOUR kids from this inevitability? It will certainly come in their lifetimes, if they're under 50.
To set the record straight: I would happily pull the plug myself if doing so kept one dime from the IRS. In fact, I'm sorta planning on it if congress fails to act before 2010. I know a bunch of other old geezers who feel exactly the same way. Please stop talking as though you knew what we are thinking. It's not the families who are accelerating or decelerating the deaths of their sick parents, it's the parents who are doing it, you nincompoops.
I have already paid tens of millions in taxes over the years. The federal government wastes obscene amounts, not even counting the wars we fight. If you can name one single government program (other than NASA and the GSA) that achieved its goals in ANY significant way I'll consider adding you to my will. Post here --- I'll see it.
One last thing: Warren and Bill are laughing up their sleeves when they profess to want to pay more taxes. Both of them, like me, know exactly how to write a check to the IRS if they wanted to. Both of them, like me, have small battalions of tax attorneys working to minimize their tax burdens. Both of them, unlike me, are avoiding huge estate tax bills by funding the Gates foundation. That strategy works when you're in the bigs and have 10s of billions --- it doesn't work nearly so well in my AAA league.
It saddens me when people say that the feds deserve more money because they've mismanaged the budget and run up deficits. It infuriates me when people assume that the screw-ups in government will spend my estate more wisely than my own wise, hard-working, beautiful ex-wife and children.
A Great Place to start is the Citizens Against Waste Website:
http://www.cagw.org/site/PageServer
A Few Examples from their site - but their yearly book covers over 10,000 pork projects:
$3.8 million for the Old Tiger Stadium Conservancy in Detroit;
$1.9 million for the Pleasure Beach water taxi service in Connecticut;
$1.8 million for swine odor and manure management research in Ames, Iowa;
$380,000 for a recreation and fairgrounds area in Kotzebue, Alaska;
$143,000 for the Greater New Haven Labor History Association in Connecticut;
$95,000 for the Canton Symphony Orchestra Association in Ohio; and
$71,000 for Dance Theater Etcetera in Brooklyn for its Tolerance through Arts initiative
ORG: Wow, thanks for sharing that point of view. That's very honest of you, and it is an example of real behavior modification based on financial considerations. I expect there are many like you, in addition to those who try to cheat the system by reporting false dates of death though as you say that's more difficult than just writing a random date on a tax form.
You are kind of correct. First there are issues of apportionment - this is when someone's Will says specifically which asset should allocate the tax. But beyond that for a second - if there is an estate of $10mil and 2 heirs, aren't they getting less because of the estate tax? Instead of getting $5mil each they are getting 3.375ish. So regardless of what checking account it comes from (i.e. the Estate checking account or theirs) aren't they negatively affected.
Then on top of those issues there are actually 8 or 9 states with inheritence taxes - which means the receipent actually owes money to the state.