Pass-Through Business Alternative Income Tax Act

New Jersey may be getting a lot tax friendlier for small business owners.  I hesitate to even write this blog post, as I generally prefer to wait until legislation is actually passed before I write on a topic (mainly because it is a waste of everyone's time to read about something that may never come into law).  However, the NJ State Senate has already passed the "Pass-Through Business Alternative Income Tax Act" by vote of 40-0, so there's a good chance that this may become law, and very soon.

Here's the gist of how the new law is supposed to work:
1)  NJ will start implementing a new business tax, effective January 1, 2018, on pass through business entities (such as limited liability companies, S-Corporations, and Partnerships).
2) This new business tax will be roughly equal to the tax the owners of the business are already paying on their NJ income tax returns.
3) The owners of the business will receive a dollar for dollar credit on their personal NJ income tax returns for any business taxes paid.  

The legislature was effectively trying to make this a wash from a NJ revenue standpoint, but let's be clear, this will raise significant revenue for New Jersey because the tax rates don't align perfectly with the income tax rates for either individuals or married couples.  

For example, under the new business tax law, there is a:
1) 5.525% tax on the distributive proceeds less than $250,000 (per owner);
2) 6.37% tax on distributive proceeds between $250,000 and $1M (per owner);
3) 8.97% tax on distributive proceeds between $1M and $3M (per owner); and
4) 10.75% tax on distributive proceeds over $3M.

For a single person, the NJ income tax rates are as follows:

NJ Tax Bracket - Single Person	NJ Tax Rate
$0.00 - $19,999	1.4%
$20,000.00 - $34,999	1.75%
$35,000.00 - $39,999	3.5%
$40,000.00 - $74,999	5.53%
$75,000.00 - $499,999	6.37%
$500,000.00 - $4,999,999	8.97%
$5,000,000 +	10.75%

For a married couple, the NJ income tax rates are as follows:

NJ Tax Bracket - Married Couple	NJ Tax Rate
$0 - $19,999	1.4%
$20,000 - $49,999	1.75%
$50,000 - $69,999	2.45%
$70,000 - $79,999	3.5%
$80,000 - $149,999	5.53%
$150,000 - $499,999	6.37%
$500,000 - $4,999,999	8.97%
$5,000,000.00 +	10.75%

However, if this new law goes into effect, it will be a significant net savings for NJ business owners because they will not be as badly impacted by the new federal law.   Remember, the Tax Cuts and Jobs Act signed by President Trump stated that State income taxes and local property taxes are capped at $10,000 per year.  The reason that NJ business owners will not be adversely affected by this new (and usually higher) business tax is that NJ is converting a non-deductible state income tax (from your personal return) into a deductible business expense.

Let's run through an example.  Let's say that Joanne owns a nearby estate planning law firm structured as a limited liability company.  Joanne's net income after all expenses (except state income taxes) is $150,000.  (For purposes of this example, let's assume that she is single and has no other income and is not entitled to any other deductions other than a $10,000 property tax deduction for her primary residence.)  

If the New Jersey Pass-Through Business Alternative Income Tax Act does not come into law, then she would have a state income tax liability of approximately $7,365 and a federal income tax liability of $19,533 (after factoring in the 199A deduction of 20% and the $10,000 property tax deduction).  Total tax liability of approximately $26,898.  Joanne does not get to deduct the $7,365 from her federal income taxes.

If the New Jersey Pass-Through Business Alternative Income Tax Act does come into law, then there would be a NJ business tax of $7,875, no NJ personal income tax, and a federal income tax liability of approximately $18,118 after reducing the $150,000 of income by $7,875 and then factoring in the 20% 199A deduction.  Total tax liability of $25,993.  

As you can see, the big difference is that the $7,875 should be considered a deductible business expense for purposes of the federal tax law.  So even though there is an additional $510 of NJ state taxes, there is $1415 less of federal income taxes, for a total savings of $905.  

If and when the NJ law actually passes, I will provide another update.

* Note - all calculations for taxes done using free software with minimal assumptions, so please do not rely on them.  I am just trying to illustrate how the new tax law should work in theory.

Will the New Jersey Estate Tax Repeal Become Permanent?

As most of my estate planning clients are aware, I have been very cautious regarding whether or not New Jersey will keep a $2,000,000 estate tax exemption beyond 2017 or allow for a full repeal. However, it is worth noting that the front-runner for Governor, Phil Murphy, released part of his tax and spending plan today.  See this article on NJ.com: http://www.nj.com/politics/index.ssf/2017/08/murphy_tax_plan_would_raise_13_billion_heres_whod.html

As part of the plan, he stated that he has NO intentions of re-introducing the estate tax.  Accordingly, there is probably a good chance that the repeal of the NJ Estate Tax does become permanent.  Only time will tell though.

Same Sex Marriage Now Legal In New Jersey

Effective today, same sex marriage is now legal in New Jersey after Governor Chris Christie dropped his plans to appeal the ruling of Superior Court Judge Mary Jacobson.  On September 27, 2013, Judge Jacobson had ruled that New Jersey must allow same sex marriages in the wake of the Supreme Court's decision in United States v. Windsor.

Previously, New Jersey had only allowed Civil Unions and it recognized same sex marriages from other jurisdictions as Civil Unions.  The Governor elected to drop his appeal after receiving very clear signals from the New Jersey Supreme Court that his appeal would not be successful. 

Remaining at issue is whether or not all Civil Unions in New Jersey would automatically be treated as same sex marriages.  The New Jersey legislature had sought to pass a bill to that affect several months ago, but it was vetoed by the Governor.  (The bill included a provision that couples could opt out of the automatic conversion to marriage if they did so within 30 days.)  As it stands, if a couple wishes to be recognized as a married couple, they should not rely on this automatic conversion, but should instead proceed with a marriage ceremony.

I would like to remind individuals who were married in another state that they should consider refiling their income tax returns for the past few years if there is a tax benefit to do so.

Summary of Tax Law Changes 2013 (Fiscal Cliff Deal)

As you know by know, the Congress and the President have finally agreed to a fiscal cliff deal.  While I haven't had a chance to read all 157 pages of the American Taxpayer Relief Act of 2012 yet, here is what I can gather from most major news sources:

1) The federal estate tax, gift tax and the federal generations skipping transfer (GST) tax will continue to have $5,000,000 exemptions, indexed for inflation.  The estate tax, gift tax and GST tax exemption amounts were $5,120,000 for 2012.  It will be $5,250,000 for 2013 after the most recent inflation adjustment.  The highest rate will go up from 35% to 40%.  This is a permanent change to the law.

  Note: Technically there are mulitiple rates for estates under $5,250,000.  This will not affect most people, but it can affect non-resident aliens with significant assets in the US or people who are otherwise not entitled to the full estate tax exemption.

2)  The income tax rates for 2013 are:
                              Married Filing Jointly        Single
     10% Bracket    $0 - 17,850                       $0 - 8,925
     15% Bracket    $17,850 - 72,500              $8,925 - 36,250
     25% Bracket    $72,500 - 146,400            $36,250 - 87,850
     28% Bracket    $146,400 - 233,050          $87,850 - 183,250
     33% Bracket    $233,050 - 398,350          $183,250 - 398,350
     35% Bracket    $398,350 - 450,000          $398,350 - 400,000
     39.6% Bracket $450,000 and up              $400,000 and up

    The change here was an increase in the top rate for married couples earning $450,000 or more and individuals earning $400,000.  For Head of Household, I believe it is $425,000.  The amounts here have been indexed for inflation for 2013.

3) Payroll taxes will increase to 6.2%, reverting back to the levels of 2010.

4) There will also be a phaseout of personal exemptions for individuals earning more than $250,000 and couples earning more than $300,000.  Head of Household limit is $275,000.  These appear to be indexed for inflation.

5)  Permanently indexes Alternative Minimum Tax (AMT) for inflation.

6)  Capital Gains Tax Rates for 2013 go from 15% to 20% for individuals earning $400,000 or more and couples earning $450,000 or more.  It will stay at 15% for everyone else.  (Caveat:  It is unclear to me at this stage whether the $400,000 & $450,000 threshhold refers to all earnings or simply earnings from dividends and capital gains.)

7) Extenstion for 5 years of the child tax credit and $2,500 tax credit for college tuition.

8) Extension for 1 year of the accelerated "bonus" depreciation on business investments.

9) Extension of tax free distributions from individual retirement plans for charitable purposes.

In other news, the 2503(b) annual exclusion amount was will increase from $13,000 to $14,000 as it was indexed for inflation.  This is not as part of the Fiscal Cliff deal.

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Revised on January 11, 2013. Indexing brackets for inflation.

Deficit Reduction Package - Change in Estate Tax Exemption?

It's way too early to know if President Obama's Deficit Reduction Package will have any traction, but I did want to point out that under his proposal, the federal estate tax exemption would be reduced from the current level of $5,000,000 per person to $3,000,000 per person starting in January of 2013. Additionally, the maximum estate tax rate would go from the current rate of 35% to 45%. The changes in the estate tax exemption amounts and rates would be part of an overall package to reduce the deficit.

I am skeptical this will pass mainly because ever since the Republicans have taken over the House, President Obama and the Democrats have not been able to successfully pursue much of their agenda. It is worth noting though that the Democrats do have significant leverage with respect to this one tax because in the event the parties cannot agree on anything, after 2012 the federal estate tax will revert to pre-2001 levels. This would mean a federal estate tax exemption amount of $1,000,000 (indexed for inflation) and a maximum estate tax rate of 55%.

The Future of Estate Tax: Will “13” Prove To Be A Lucky Number?

In my blog post of November 12, 2010, I made reference to a dinner bet I made with my father as to when a decision would be made on the federal estate tax issue. (Yes, Dad, I haven't forgotten you were right and I still owe you dinner.) At that point, we were nearing the end of a year in which there was no estate tax and we were about to revert to a tax, up to 60%, on transfers at death in excess of $1,000.000.

In an 11th hour move on December 17, 2010 President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act into law, which reinstated the federal estate tax – but with a $5 million exemption limit and a 35% tax rate - to begin again January 1, 2011 and to sunset on December 31, 2012. Additionally, the concept of portability of the estate tax exemption between spouses was introduced.

So while we achieved relative certainty for two years, January 1, 2013 now marks the unlucky date of reversion to the $1 million estate tax exemption, estate tax rates as high as 60%, and an elimination of the portability provision.

To provide longer term certainty, President Obama, in his recently proposed 2012 budget, is hoping to change the estate tax exemption to $3.5 million, the same as it was in 2009. Additionally, he is seeking to reduce the gift tax exemption and GST tax exemption to $1,000,000 with an increase in the estate and gift tax rates to 45%. The proposal includes making portability of the exemption amount between spouses permanent, for a combined exemption up to $7 million.

You can look at President Obama's approach in two ways. You consider this change as increasing the estate tax (by raising the tax rate and lowering the exemption from its current level). However, you can also consider this reducing the estate tax (by lowering the tax rate and raising the exemption from what would happen in 2013 if nothing were done.) All I hope for is an end to these constant changes. It will be lucky for everyone when we have certainty, beyond two years, on the issue of the estate tax.

I should note that uncertainty is likely to remain as I doubt Congress will agree with President Obama's plan. Republicans control the House and they are still looking for a full repeal of what they call “the Death Taxes.”
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Thank you to my paralegal, Elizabeth Carter, for help with this post.

Revised Estate Tax Appears to Be a Done Deal

As I write this post, the new tax law appears to be a done deal. We are just awaiting President Obama to sign off on it. It will probably take me a week or so to digest all of the finer points of the new tax law, but I will briefly discuss the main points that I am aware of:

1. The new estate tax AND gift exemption amounts will be $5,000,000 per person (this is a reunification, previously the gift tax exemption amount had been $1,000,000) - This takes effect in 2011;
2. There will only be one rate for gift and estate taxes - 35% on transfers above the exemption amount - This also takes effect in 2011;
3. Capital Gains tax rates will continue at 15%
4. It appears that there is a portability provision. This would allow one spouse to give the other spouse everything outright at death, and then the surviving spouse would have a $10,000,000 exemption. (NOTE: This would not be advisable in New Jersey or New York where an increase in state estate tax would result.)

Also of note:

1. There appears to be a 0% GST tax rate for 2010, so for the super wealthy, you have another few weeks to fund generation skipping trusts. In 2011 and 2012, the GST Exemption amount will be $5 million;
2. There appears to be an extension of a provision that would allow certain IRA owners to contribute money in their IRA to charity with favorable tax consequences;and of course
3. There will be a continuation of almost all of the tax rates that were in place in 2010.

It looks like I owe my dad a dinner.

Betting on the Estate Tax

With all the uncertainty surrounding the federal estate tax, I still refuse to speculate on what will happen. I did however make a bet with my father (Dinner) over when a decision will be made on the estate tax.

My father believes that since Congress is in a lame duck session, they will try to act and create a little certainty to make things clear for planners and the citizens of this country.

I believe that the Democrats have absolutely nothing to gain by acting before 2011. If they vote in 2010, they will want to vote on something less than a full repeal of the estate tax - which is effectively a tax increase.

I believe that the Democrats can and will position the sunset as a Republican act (since it was done in 2001 when the Republicans controlled the House, Senate and Presidency). Then, in 2011, when the estate tax exemption returns to $1 million and up to a 55% tax rate, the Democrats can offer a tax cut without having to offer a full repeal.

The Democrats can then force the Republicans to vote against tax cuts that they don't like.

Who will win the bet? Clarity or politics. I've bet on politics winning the day.

So, Will there be a Federal Estate Tax in 2010?

On December 3, the House of Representatives passed a bill to permanently extend the Federal Estate Tax Exemption (H.R. 4154). The current exemption is $3.5 Million per person, or $7 Million for a couple, with a 45% tax on the decedent's assets over the exemption amount.

As of yesterday though, the Senate has yet to act, which means that the law passed by President Bush in 2001 remains in effect. If Senate does not pass bill to deal with this by New Year's, that will mean that on January 1, 2010 there will be no federal estate tax - maybe.

Why do I say maybe? Because it is still very likely that Congress will act after the new year to reinstate the tax, and make it retroactive to January 1st. They've done it before, with the permission of the Supreme Court. (see U.S. v. Carlton)

Even more troubling, the repeal would only be for one year, and then the exemption amount would come crashing back down to One Million Dollars (indexed for inflation) in 2011. This does not make for easy planning and will most adversely affect individuals who have children from one relationship and are now married to a different person. People who are in this situation should seek out an estate planning attorney immediately because it is likely the formulas in their Wills may cause a disastrous result. Many formulas can be read so that either the children from the prior relationship are completely cut out or the new spouse is completely cut out. There is an easy fix to this by setting caps on how much a spouse or child can get, but I reiterate - many old formulas will not work.

Most estate planning practitioners that I know still strongly believe that the government will pass a law to keep some form of estate tax - mainly because we find it hard to believe that the government will give up so much money from the people who can most easily afford to pay it. However, for those of you who have been completely ignoring the issue, it is time to start paying attention because a complete repeal of the federal estate tax will actually have a large capital gains tax consequence.

To understand this capital gains tax consequence, you must first understand and appreciate the incredible importance of "Basis". If the federal estate tax is indeed repealed, executors will be entitled, for an individual decedent, to allocate to the decedent's assets up to $1.3 million in basis plus the sum of the decedent's unused capital loss carryovers, net operating loss carryovers and unrealized losses on property owned at the date of death (IRC Section 1022(b)). No asset may be increased in excess of fair market value though.

In addition to the $1.3 million basis increase available to all beneficiaries of an estate, the executor may allocate another $3 million of basis to assets passing to a surviving spouse. (This benefit only applies to heterosexual couples.)

As a practical matter, the repeal of the estate tax will most negatively affect those few individuals who have a lot of highly appreciated assets and those individuals who might not have had to file a return at all. The reason that it negatively affects the people who might not otherwise had to file a return is because I believe that a return will have to be filed to properly allocate basis to your assets. This will result in extra attorney fees for many.

The pessimist in me says that the government will wait until about August of 2010 or so and make a retroactive law, making estate planning and administration most cumbersome and costly.

Understanding Basis

If you want to sell an asset, particularly a valuable asset, no one should do so without first understanding what the tax consequences of that sale might be. The tax that most often affects the sale of a valuable asset (in a non-business setting), is the capital gains tax. To understand this capital gains tax consequence, you must first understand and appreciate the incredible importance of "Basis".

An asset's basis is often referred to as the amount an asset cost when you buy it. For example, if you buy stock at $20 and sell it at $100, the basis of the stock is $20 and the gain on the sale is $80. If the stock was held for an appropriate time amount, the gain would be considered capital gain and taxed at the capital gains tax rate.

Now, the basis in an asset can change for a variety of reasons. For example, let's say that the stock that you bought split, you would have to split the basis in the stock in the same way that the stock split. Additionally, let's say the asset is a house, or some other type of depreciable asset. Every time you depreciate the asset, the basis is reduced. If, on the other hand, you make capital improvements to the asset, like putting an addition on to a house, that increases the basis of the asset.

So, let's assume that you buy a rental property for $200,000. You spend $100,000 improving it, depreciate it by $80,000, and then ultimately sell it for $750,000. The basis in the property would be $220,000 ($200,000 + $100,000 - $80,000). The gain would be $530,000, and most likely taxed at the capital gains rate of 15%.

Another major factor in determining the basis in property is whether, under current law, a person holds that asset at the time of his or her death. Currently, when a person dies, the heirs take the assets of the decedent with a basis equal to fair market value. (Often times this is called a step up in basis - but that is a bit of a misnomer as the basis can actually be lower in a bad economy.)

So for example, let's say that Dad dies owning a house that he purchased for $350,000, and at the time of his death it is worth $550,000. If the heirs sell the house shortly after his death for $560,000, there is only $10,000 of gain, not $210,000 of gain because of the increase in basis due to Dad's death.

Now let's complicate matters. Dad and Mom own that same property that they bought for $350,000. Dad dies when the value of the property is $400,000 and Mom dies when the value is worth $550,000. The basis in the property will be determined by whom the property was left to. If Mom inherited the property from Dad and then died, the basis of the property is the full $550,000.

If Dad left the property to daughter, and the other half the property went to daughter when Mom died, the basis will be split. The basis will be $475,000 in the hands of daughter. (1/2 of the property with a $200,000 basis as a result of Dad's death and 1/2 of the property with a $275,000 basis as a result of Mom's death.)

I emphasized "under current law" earlier because that may all change on January 1, 2010. In 2001, President Bush passed a law that eliminates the federal estate tax and eliminates the fair market date of death basis rule. There will be another form of capital gains tax exemption that will go into affect that I review in another post.

Lost in the debate over the estate tax is the importance of the rule revaluing property so that it takes on a date of death basis. One of the big problems that people have is keeping proper records of the basis of their assets. Sometimes, assets can be passed down for generations before they are sold. If the owner cannot provide proof of an assets basis, the government will assume the basis is Zero, causing a potentially very large tax.

So while keeping track of the basis of your assets was always important, it may be even more important to safeguard your paperwork pertaining to your valuables if the estate tax is truly repealed.

It's Looking More and More Like We Will Keep the $3.5 Million Estate Tax Exemption

With all the talks about the Democrats negotiating a budget in a way to avoid a filibuster on health care, one should not overlook the fact that the budget includes an extension of the current Federal Estate Tax Exemption. Under current law, there is an federal estate tax exemption of $3.5 Million this year, there is no estate tax in 2010 and the estate tax is scheduled to return with only a $1 Million exemption (indexed for inflation) in 2011.

With the budget deficits mounting, there is no practical way the government will give up that revenue and everyone involved despises the uncertainty of the law. So, the extension of the $3.5 exemption will provide certainty to both estate planners and the number crunchers in D.C. It should be noted that it appears the 45% tax on estates over the $3.5 Million threshold will remain intact also.

Taxing Politics - Part II

In an earlier post, I had mentioned that John McCain wished to eliminate the estate tax. According to his web site, the stance he is currently taking is to increase the Estate Tax Exemption amount to $10 Million per person and reduce the estate tax rate from 45% to 15%.

According to the Tax Policy Center Urban Institute and Brookings Institution, Barack Obama and Hillary Clinton plan to raise the estate tax exemption amount to $3.5 Million per person (the level it is scheduled to go to in 2009) and freeze it at that level. See: http://www.taxpolicycenter.org/taxtopics/election_issues_matrix.cfm

Taxing Politics

The 2008 political season officially began last night in Iowa. Accordingly, I thought it would be helpful to look at each candidate's tax policies, especially their estate tax policies. I've listed only those who I consider to be the viable candidates. For fun, I put them in order of how they finished in the Iowa caucuses.

The Democratic Candidates

1. Barack Obama
   Income Taxes
   --> Senator Obama appears to favor a reduction in income taxes for individuals making less than $50,000. This appears to be balanced by an increase on those whose income puts them in the top 1% of the country. He voted against a repeal of the alternative minimum tax.
   Estate Taxes
   --> It is clear that Senator Obama is in favor of keeping a federal estate tax, but it is unclear at what level. He voted againt raising the threshold to $5,000,000 per person.
   Other Tax and Probate Related Issues
   --> Senator Obama is in favor of closing tax loopholes for companies that move jobs abroad and in favor of rewarding companies that create jobs in America.
2. John Edwards
   Income Taxes
   --> Senator Edwards appears to favor using a combination of credits to reduce the taxes of those earning less than $75,000. The most notable credit is a large increase for Child Care. He voted against a repeal of the alternative minimum tax. He wants an increase in the capital gains tax rate to 28% for those earning over $250,000.
   Estate Taxes
   --> Senator Edwards is in favor of keeping the federal estate tax at the same levels as are currently in place, $2,000,000 per person.
   Other Tax and Probate Related Issues
   --> Senator Edwards is in favor of closing tax loopholes for hedge fund and private equity managers (meaning that they would be taxed at income tax rates, not capital gains tax rates). He also had a very interesting proposal that would require the IRS to prepare tax returns for those people who are simply W-2 workers or receive all income from 1099's.
3. Hillary Clinton (No real public plan yet)
   Income Taxes
   --> Senator Clinton wants to keep the AMT, but it is unclear at what level.
   Estate Taxes
   --> Senator Clinton is in favor of keeping the federal estate tax at the same levels that will be in place starting in 2009, $3,500,000 per person.
   Other Tax and Probate Related Issues
   --> Senator Clinton proposes increasing or removing the $95,000 cap from the payroll tax. Currently, only the first $95,000 of income is subject to payroll tax. Payroll taxes are for such things as Social Security, Medicaid and Medicare.

The Republican Candidates

1. Mike Huckabee
   Governor Huckabee wants to eliminate ALL income, payaroll, gift, estate, capital gains, alternative minimum, Social Security, Medicare and self employment taxes. He wants to replace these with a consumption tax (i.e. a tax on what we buy - similar to a sales tax). The consumption tax rate would be about 23% inclusive (or about 30-34% exclusive). For a view of the plan known as FairTax given by supporters, click here. For an opposing view, click here. The consumption tax would theoretically be on EVERYTHING, including new home purchases, rent, doctor's bills, and worst of all - LEGAL FEES. It would however exclude used items. (Hmm... I wonder if you can have used legal services...)
   Income Taxes
   --> See above
   Estate Taxes
   --> See above
   Other Tax and Probate Related Issues
   --> See above
2. W. Mitt Romney
   Income Taxes
   --> Governor Romney generally wants to lower tax rates for everyone.
   Estate Taxes
   --> Governor Romney is in favor of permanently repealing the estate tax. It is unclear if he wishes to repeal the gift tax.
   Other Tax and Probate Related Issues
   --> Governor Romney wants to get rid of taxes on interest, dividends and capital gains for those with an adjusted gross income under $200,000.
3. Fred Thompson
   Income Taxes
   --> Former Senator Thompson plans to index the AMT for now and repeal it eventually. He believes in instituting a flat tax which would give much larger personal exemptions, but get rid of all deductions.
   Estate Taxes
   --> Former Senator Thompson wants to elimate the estate tax. It is unclear if he wishes to repeal the gift tax.
   Other Tax and Probate Related Issues
   --> He has an interesting proposal to let tax payers choose the current tax forms or a flat rate form with only 2 exemptions.
4. John McCain
   Income Taxes
   --> Senator McCain is in favor of permanently repealing the AMT. He would make the currently scheduled tax levels permanent.
   Estate Taxes
   --> It appears Senator McCain wants to elimate the estate tax. It is unclear if he wishes to repeal the gift tax.
   Other Tax and Probate Related Issues
   --> Would ban taxes on cell phone messages. (I don't think that there is one...)
5. Ron Paul
   Congressman Paul wants to get rid of the income tax completely (which would require severe spending cuts).
   Income Taxes
   --> See above
   Estate Taxes
   --> It appears that Congressman Paul wants to eliminate the gift, estate and GST tax.
   Other Tax and Probate Related Issues
   --> It appears he wants to fund the goverment with fees such as: tariffs, excise taxes, user fees and highway fees.
6. Rudy Giuliani
   Income Taxes
   --> Former Mayor Giuliani intends to permanently lower the marginal rates to what they will be under the Bush tax act, or lower. He intends to tie the AMT to inflation. He also proposes an income exclusion up to $15,000 for families without employer based health care.
   Estate Taxes
   --> Former Mayor Giuliani wants to eliminate the estate tax. It is unclear if he wishes to repeal the gift tax.
   Other Tax and Probate Related Issues
   --> He wants to drop the corporate tax rate from 35% to 25%.

Sources include: www.ontheissues.org, the candidate's websites, and various news articles.