On January 1, the estate tax—now at zero—comes roaring back. Assuming congressional inaction, the tax kicks in at 55 percent for all estates over $1 million. In fact, it's unlikely that the tax will be back in full; this is one of the issues the lame ducks are supposed to be dealing with right now. But where and how new rates are fixed means there's a lot of cash at stake, which means there's a lot of cash being spent on the Hill.
Life insurance is a good way to work around a system of high estate taxes—payouts are untaxed, and likely to remain that way. This means the life insurance industry has a lot to gain in a world with high estate taxes. From a nice little paper [PDF] for the American Family Business Foundation by Tim Carney and Dick Patten:
http://reason.com/blog/2010/12/02/life-insurance-companies-love
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Life Insurance companies have had a good year, one of, if not the strongest sector in the world economy in the last year. If the Estate Tax comes back in the US (Inheritance Tax as it’s known this side of the pond) it could be an even bumper year for insurance companies in the US. Another reason Zurich is moving back into the US Insurance market perhaps?
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