Sunday, September 19, 2004
The ABA Tax Section and Real Property, Probate and Trust Section have released the 228-page Report on Reform of Federal Wealth Transfer Taxes by the 34-person Task Force on Federal Wealth Transfer Taxes (which included four Tax Profs: Mary Louise Fellows (Minnesota) (the Reporter), Joseph Dodge (Florida State), Jeffrey Pennell (Emory), and Lawrence Zelenak (Duke)). Here is part of the Introduction:
[The Report] provides expert analysis of the changes enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA or Act) regarding federal wealth transfer taxes. The Report does not consider policy questions having to do with the economic effects of a wealth transfer tax system as compared to other systems of taxation. It also does not consider policy questions having to do with whether redistribution of wealth is an appropriate goal of a tax system. The central concern of the Report is to assess—on the basis of simplicity, compliance, and consistency of enforcement—the temporary repeal of the estate and generation-skipping transfer (GST) taxes, the phaseout period, the continuation of the gift tax after repeal, the modified carryover basis rule, and the alternatives to federal wealth transfer tax repeal.
The Report is designed to provide diverse views and perspectives on a wide range of issues concerning the current federal wealth transfer tax system and the changes the EGTRRA makes to that system. With most issues it identifies, the Report suggests options that Congress might consider, but it does not make specific recommendations for regulatory or legislative action….
The Report consists of four parts and two appendixes. Part I considers issues that pertain to the phaseout period of the estate and GST taxes and their reinstatement in 2011. Part II addresses issues arising from Congress’s retention of the gift tax for the purpose of protecting the integrity of the income tax system upon reduction and ultimate repeal of the estate and GST taxes. Part III discusses issues that will arise upon implementation of the modified carryover basis rule that takes effect upon repeal of the estate and GST taxes. Part IV and Appendix A shift attention away from the EGTRRA and consider alternatives to repeal of the estate and GST tax laws. Part IV identifies issues arising under the current estate, gift, and GST tax laws and suggests alternative ways of resolving those issues within a wealth transfer tax system. As part of its discussion, Part IV indicates alternative approaches that Congress might want to adopt during the phaseout of the estate and GST taxes. Appendix A evaluates alternatives to the current wealth transfer tax system and to the repeal of the estate and GST tax laws accompanied by a modified carryover basis rule.
