Paul L. Caron, the TaxProf blogger, provided the following chart from a 2006 article by Joshua S. Gans and Andrew Leigh, “Toying with Death and Taxes: Some Lessons from Down Under”. The chart purports to show that a significant number of the deaths in Australia were shifted from the week before to the week after July 1, 1979, the date on which the estate tax was abolished in Australia.
I haven’t read the article by Gans and Leigh, and statistics and interpreting raw data are not my areas of expertise. I was initially perplexed by the increase in the number of deaths between June 28 and June 30. However, John Gordon (transactional / real estate) and I, pooling our respective undergraduate backgrounds in philosophy and literature, concluded that many people who had been placed on life support earlier in the week had been long shots for survival. Some may have lived a few days longer, but much to their desperate family’s chagrin, didn’t quite make it to July 1.
Granted, that may be cynical and far-fetched. But see this article in the New York Post on January 11, 2010, which reported on two people whose estates will be taxed because they died several hours before the 2010 repeal.
But [the] dilemma tormented another New York family whose wealthy mother was terminally ill in December.
“The family could have put her on aggressive, artificial life support, with tubes and medical devices, until January 1, thereby saving $3 million in federal estate taxes,” a source said. “The family chose the kinder path — letting her die naturally and peacefully.” She didn’t make it to New Year’s Day.
Just to put that in perspective: As of right now, there is no federal estate tax for people who have died in 2010. Congress may still act to reinstate the tax retroactive to January 1, 2010, and several members of Congress have indicated that they intend to do so.
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