The failure of this Congress to enact an extension and/or modification of the estate tax is underscored by the recent death of billionaire Dan Duncan, Houston’s wealthiest citizen. Today’s New York Times reports that Mr. Duncan , who passed away late this past March at the age of 77, had a net worth of about nine billion dollars. As most of you undoubtedly know, the estate tax which the cash-starved United States Treasury will collect from Mr. Duncan’s estate is zero, nada, zilch!

No artful estate planning was needed to achieve this financial coup. The only thing Mr. Duncan had to do for his estate to avoid paying a nickel of tax to the federal government was to die this year, 2010, after the Bush estate tax laws sunsetted and were not replaced. The Times points out that had he died but three months earlier, his estate would have been subject to a 45% tax of its assets with a value in excess of  three and a half  million dollars. Had he survived to 2011, the old one million limits would have kicked in and his estate would have paid tax of 55% of its taxable assets over that amount.

Under the old law in effect when Mr. Duncan executed his last will in 2006, any amount which he would have left to his surviving spouse would have been tax exempt. In fact, he left his wife the family home together with several hundred million dollars of stock with the bulk of his estate going to his children and grandchildren. That said, his heirs would have paid several billion dollars of estate tax under either  law, enough for a downpayment on a bailout, weapons system or to make a little dent in repaying the national debt. In any event, we don’t have the money that an estate tax law would have generated and we still have the confusion that the lack of a law creates.