Kevin Price
George Steinbrenner avoids estaticide
By Kevin Price
With whatever complaints you had about George Steinbrenner, you have to be impressed with his timing. Because of dying in 2010 and not 2011, he saved approximately $600 million. For quite some time I have been warning people about a concept I call "estaticide." I describe "estaticide" as the extermination of individuals because of the punishing tax implications. That is, people who feel they need to die early in order to be able to have something to leave their loved ones. It is not a serious reality, but I'm sure many Americans will think twice about when they die when they look at people like Steinbrenner. If Steinbrenner has passed away in 2011, his estate would have faced a crippling tax
The situation we have coming in 2011 is due to an interesting path of recent tax history. In 2001, President Bush wanted to provide relief to families that were devastated by the death of a family member. It is bad enough that mom or dad have passed away, without picking their pockets in the process. This led to the creation of the Taxpayer Relief Act of 2001 (which modified a similar act in 1997). This law would lead to a gradual increase in the tax credits associated with estate taxes and a reduction in the maximum rate until 2010 in which the tax would be repealed. The bad news is that the rate would go back to 2002 levels in 2011. That means the rate would go from zero to a maximum rate of 50 percent overnight.
In spite of the fact that it appears the Steinbrenner estate can breathe a sigh of relief, no estate of people passing away in 2010 may ever be completely out of the woods with the behavior of the current Congress. Remember, this is the same group that passed a tax totaling an entire bonus on AIG executives and it was done retroactively. Ronald Acucutt, an estate tax attorney with McGuire Woods told the Wall Street Journal that, "Not only is the future uncertain, but the past is also. We have no idea what the law is."
The National Center for Policy Analysis notes that the story of Steinbrenner paints an interesting estate tax picture:
Recently I had a great interview with Gerri Willis of the Fox News Network on this issue. Check out that conversation here.
© Kevin Price
With whatever complaints you had about George Steinbrenner, you have to be impressed with his timing. Because of dying in 2010 and not 2011, he saved approximately $600 million. For quite some time I have been warning people about a concept I call "estaticide." I describe "estaticide" as the extermination of individuals because of the punishing tax implications. That is, people who feel they need to die early in order to be able to have something to leave their loved ones. It is not a serious reality, but I'm sure many Americans will think twice about when they die when they look at people like Steinbrenner. If Steinbrenner has passed away in 2011, his estate would have faced a crippling tax
The situation we have coming in 2011 is due to an interesting path of recent tax history. In 2001, President Bush wanted to provide relief to families that were devastated by the death of a family member. It is bad enough that mom or dad have passed away, without picking their pockets in the process. This led to the creation of the Taxpayer Relief Act of 2001 (which modified a similar act in 1997). This law would lead to a gradual increase in the tax credits associated with estate taxes and a reduction in the maximum rate until 2010 in which the tax would be repealed. The bad news is that the rate would go back to 2002 levels in 2011. That means the rate would go from zero to a maximum rate of 50 percent overnight.
In spite of the fact that it appears the Steinbrenner estate can breathe a sigh of relief, no estate of people passing away in 2010 may ever be completely out of the woods with the behavior of the current Congress. Remember, this is the same group that passed a tax totaling an entire bonus on AIG executives and it was done retroactively. Ronald Acucutt, an estate tax attorney with McGuire Woods told the Wall Street Journal that, "Not only is the future uncertain, but the past is also. We have no idea what the law is."
The National Center for Policy Analysis notes that the story of Steinbrenner paints an interesting estate tax picture:
- Steinbrenner's estimated net worth is $1.1 billion according to Forbes.
- Steinbrenner was a 55 percent owner of the Yankees, which includes the team, the YES Network and the new Yankee Stadium, as well as several homes and a stud farm in Florida, according to Forbes.
- Forbes estimated that the Yankees, which Steinbrenner acquired in 1973 for a mere $10 million, are worth $1.6 billion. However, the team is extremely leveraged because of debt from the new stadium.
- Even the most casual observer can see how significant the savings were for the Steinbrenner family.
Recently I had a great interview with Gerri Willis of the Fox News Network on this issue. Check out that conversation here.
© Kevin Price
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