A commenter asked about estate planning by the Yankees, and I looked up the death tax, and it turns out it would be very good for George Steinbrenner to die in 2010:
According to this, there is no federal inheritance tax in 2010. Which brings up a rather morbid question: Should George kill himself next year so his children avoid the tax? If he dies in 2011, the children would pay 55% on everything over $1 million. If you’re in bad shape and rich, I can see where those people might commit suicide at the end of 2010.
Of course, that’s only true if his wife also dies. I believe spouses inherit without taxation. Maybe they’ll do a whole Romeo/Juliet thing. There’s an idea for an aspiring playwright, The Tragedy of the Death Tax. An old rich man struggles with the idea of killing himself so his children can inherit more. They beg him not to, but in the end he drinks the poison. Maybe there’s a beautiful, young gold digger involved. The Petrified Forest meets ‘Night Mother.
The Cubs were destroyed in 1981 by the inheritance tax — Wrigley heirs did not have the cash to pay it, had to get rid of Bruce Sutter and finally sell. There’s a certain amount of planning that can be done to minimize the hit, buying life insurance for one thing, but not clear whether the Steinbrenners could keep the team without remortgaging or bringing in new partners unless Congress changes the law to make the tax lower starting in 2011. Contrary to some things you might read, the fact that the Yankees are structured as a LLC does not eliminate the inheritance tax, it still applies to stock transfers. I guess they could try to turn the Yankees into a charity, that would be a laugh.
This may not be that farfetched. Here is the 2001 winner of te ig nobel prize
ECONOMICS
Joel Slemrod, of the University of Michigan Business School, and Wojciech Kopczuk, of University of British Columbia [and who has since moved to Columbia University], for their conclusion that people find a way to postpone their deaths if that that would qualify them for a lower rate on the inheritance tax. [REFERENCE:”Dying to Save Taxes: Evidence from Estate Tax Returns on the Death Elasticity,” National Bureau of Economic Research Working Paper No. W8158, March 2001.]
http://improbable.com/ig/winners/
There is an entire industry built around scalping family business owners for “second-to-die” insurance coverage. I’m sure Mr. Steinbrenner has this coverage. I just wish I was Warren Buffett. He’s making a killing off the Steinbrenners of the world. Check out http://www.youtube.com/ettruth
It also wrecked the Washington Redskins, IIRC. The son couldn’t inherit from Jack Kent (?) which allowed Dan Snyder to swoop in and buy.
@Seth: I’m glad you brought that up. When Warren Buffett comes out in favor of the death tax, no one ever calls him on his conflict of interest.
A lot of Mr. Buffett’s “wise advice” has a potential of a conflict of interest. He has so many different businesses that he is involved in a little of almost everything.
God forbid George’s spawn only get to inherit 45% of his riches! How dare the government take money the Steinbrenner children didn’t earn away from them! Especially when those taxes will help keep the U.S. afloat! Heaven forfend!
@David Pinto: “Death tax,” DP? You’ve set too high a standard of rhetorical sophistication to use an explosive mendacity like that.
@bureaucratist: I get taxed for dying. Seems like a death tax to me. No death, no tax.
@David Pinto: YOU don’t get taxed. You’re dead. Your estate gets taxed, or your inheritors get taxed, depending how you conceptualize it. That’s why it’s traditionally been known as an estate tax, or an inheritance tax. “Death tax” is a term with political only, and no semantic, content.