Estate Taxes…they aren’t going anywhere anytime soon!
Posted by: BeamaLife Editor on 14 Jan, 2009
The Wall Street journal published an estate tax article on the top fold of the paper two days ago highlighting President-Elect Obama’s intent to retain the tax. Both chambers of Congress have debated the merits of seemingly inevitable stimulus legislation. Obama has met resistance from members of his own party regarding his intent to include tax breaks to businesses for employee retention efforts as well as payroll tax credits for low wage earners. It is easy to overlook the fallout from increased government expenditures or reduced revenue, but when discussing tax reform, it is essential to put into context the current fiscal realities that constrain the debates.
A recent CBO report projects that the 2009 deficit will total $1.2 trillion, or 8.3 percent of GDP, without any changes in current laws and policies. Enactment of the American Recovery and Reinvestment Plan, “the stimulus package,” would add to that deficit by roughly $800 billion over two years, without incorporating tax cut extensions. Additional tax cuts, should they be included in the stimulus or a separate bill, would cost approximately $100-$200 trillion for this year alone.
The President-Elect’s proposed tax plan contains numerous cuts and refundable credits. Obama has proposed making permanent the EGTRRA rates up to the $250 K threshold, while restoring the 36/39.6% rates for those who exceed this threshold. Tax credits include, but are not limited to, a mandate for automatic 401(k)s and IRAs, expanding the saver’s credit, a senior income tax exemption, extension and indexing of the 2007 AMT patch, a freeze of 2009 estate tax levels (45% top rate, $3.5 million exemption level), and a host of business credits. If enacted, the decrease in government revenue as a result of this tax package could reach nearly $3 trillion.
These figures are daunting, but our nation has faced worse, so it is important for us to keep our eyes on the light at the end of the tunnel. Consumers have responded to this crisis by changing their risk appetites to fixed and universal life products that are much more secure. A recent report from the Bureau of Labor Statistics indicates that despite the negative savings rate which has plagued the country for the past two years, savings as a portion of disposable income rose from 2.4 percent in October to 2.8 percent in November 2008.
How Safe is Your Life Insurance Company?
Posted by: BeamaLife Editor on 9 Jan, 2009
Time magazine had a wonderful article explaining why the life insurance industry is so much safer than all the other financial service industries. The article explained that insurance companies only held about ten percent of total assets in the real estate investments that pulverized the bank and investment industries. The article even explains that AIG, the insurance company, was solvent because of insurance companies and life insurance part of the business is still solvent according to New York state insurance department. Insurance companies are required by law to have money set aside to pay claims. That is very different from credit default swaps, which had no money set aside to pay claims. It also explains that insurance companies contribute to state guaranty funds, which come into play when an insurance company becomes insolvent. This make life insurance ideal not only for death benefit purpose but also for safer savings and risk management purposes. Learn more about whole life insurance, term life insurance and find the best life insurance quotes online now.
http://www.time.com/time/business/article/0,8599,1849023,00.html
