Estate tax changes might have inspired many to die before deadline

One aspect of the new Federal budget that has drawn heavy criticism is the reinstatement of the estate tax for 2010. This tax was due to disappear next year as part of a George Bush tax phase-out. However, his legislation would have expired at the end of 2010, sending the estate tax back up to 55%.

The new budget extends the current 45% tax on estates of over $3.5 million (or a joint estate of $7 million).

Those who bemoan the loss of that one year free of estate taxes might want to look at a study by two North American professors who used IRS information to study the correlation between changes in the estate tax and mortality. They found evidence that people have a modest increase in their propensity to die just in advance of an estate tax increase.