Stubs for Estate Tax

From The Shelf Project

Limit the annual exclusion to a small amount of cash or investment assets, perhaps $1,000, plus a larger amount for current consumption.  (This would be a reporting nightmare.)

Enact related party, indirect and constructive ownership rules for purposes of minority discounts.  Include in-laws as family for all related party rules.  (This is an interesting idea.)

Treat income tax paid by the grantor of a grantor-owned trust as a gift to the beneficial owner of that income.  (This would dramatically impact many IDGTs and cause a huge uproar in the estate planning community.)

Increase the income tax and capital gains tax rates of trusts.  People are putting more an more money into dynasty trusts, thereby forever avoiding estate taxes.  A tax based upon the value of the trust would be even better, but I don't know how feasible that would be.

Treat retained interest trusts as incomplete gifts until actual distributions are made, which become complete gifts in the year made, or the year a remainder interest vests (for undistributed property).  Valuation of the gift would be made only at the time the gift is complete.  If the grantor dies before all interest of the grantor in the trust has terminated, the entire trust estate would be includible in the grantor's taxable estate.

Include all life insurance proceeds in the insured's taxable estate unless the decedent contributed nothing directly or indirectly to the payment of premiums on the policy (e.g. dead peasants insurance).