ESTATE-TAX SCHEME SOAKING NOT ONLY THE RICH

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, January 6, 1993                   TAG: 9301060298
SECTION: EDITORIAL                    PAGE: A6   EDITION: METRO 
SOURCE: JOHNNIE C. BRAKE
DATELINE:                                 LENGTH: Medium
ESTATE-TAX SCHEME SOAKING NOT ONLY THE RICH
ESTATE-TAX laws are under siege again.
In April, House Majority Leader Richard Gephardt, D-Mo., introduced HR Bill 4848, which would reduce the unified estate-and-gift-tax exemption from the current $600,000 to $200,000 in 1994. This bill was purposefully bogged down in committee, with the promise by Bill Clinton to sign it if elected. (George Bush had already given the Congress notice that he would veto this legislation.)
Prior to the Reagan era, the exemption hovered at just more than $100,000, and had not been revised for decades. President Reagan, with the new Republican majority in the Senate, hammered out the existing $600,000 exemption.
Currently, a married couple can transfer up to $1.2 million in assets to their heirs with a properly structured estate plan. Unless both you and your spouse have already transferred $600,000 to beneficiaries, you could face an additional estate-tax liability of up to $373,000 on $1.2 million in assets if Gephardt and his cronies enact their proposed plan.
Many current wills set up a $600,000 trust on the death of each spouse. These credit-shelter trusts use the $600,000 exemption amount of each spouse to shelter the current maximum amount of $1.2 million. Since the assets are not transferred to the trusts until death they would be affected by the Gephardt plan.
If you act now and actually transfer assets before 1994, you can use the entire current exemption. If you don't and HR 4848 becomes law, your heirs could owe estate taxes on up to $400,000 in additional assets per spouse (the difference between the current and proposed credit limitations).
We are talking about a tax on your privilege to pass on to your children the family farm or business that you have worked a lifetime and sometimes several generations to build.
This seems to be the theme of the Democratic henchmen in Washington. Tax and spend to amass the dollars for their insatiable appetites for social control and other outdated Democratic rhetoric. From the cradle to the grave the welfare state grows larger, and where the merry-go-round stops nobody knows.
Keep in mind these dollars have already been taxed as you earned them, and now the Democrats want to increase estate taxes by 66.7 percent in one fell swoop.
Folks, we are not talking about a tax bill that will affect only the idle rich. We are talking estates that exceed $200,000. Add up homes, personal property, bank accounts and investments, and more than 70 percent of the populace will be affected.
Gephardt's plan is aimed at funding an inefficient socialized-medicine program, the future of which is uncertain, especially with a new Congress taking the reins.
Making that decision to transfer from $400,000 to $1.2 million in assets may not be easy for a married couple to make, but the prospect of an additional tax of $73,000 is a powerful motivator.
You may want to start by calling your elected representatives. Or better yet, keep President-elect Clinton and the Democrat-controlled House and Senate at bay until they can be sent back home. Watch the spend-and-tax Democrats as they have never been watched before.
Forty percent of the electorate is not even close to a majority, and Clinton and Congress need to be held accountable and made to live as consumers under the Machiavellian laws they enact. Financially strapping legislation such as this is the way that Bill Clinton and the Democrat-controlled Congress plan to "invest" in America. What he doesn't tell you is that "we" cannot invest anything in America until the Democrats who spend first and think later have first pilfered from the taxpayer.
The only difference between Jesse James and the Democrats in Washington is that Jesse faced his victims with a gun, but the Democratic power-brokers make their extractions in smoke-filled rooms.
In effect, they are leading the taxpaying masses to financial penury by further devising ways to tax hard-working people - in this instance, both in this life and beyond.

by Bhavesh Jinadra by CNB