There are those who, as the old blues tune says, if they didn’t have bad luck, they wouldn’t have any luck at all. And then there are those who are lucky. I would have to put George Steinbrenner’s family in the latter category.
You remember George, the controversial owner of the New York Yankees who kicked the can in early July. Most of the stories about him after his departure reviewed and rehashed his life as a tycoon, owner and superjerk. But in death, as it turns out, he created one more tale of interest.
It’s a tale that’s tied to the so-called death tax, also known as the estate tax. If you don’t have a few million dollars, you don’t have to worry about it. The number of Americans affected by this particular levy is estimated to be 1 to 2 percent. Usually, the death tax is somewhere in the 40 to 50 percent zone, with an exemption of 1 or 2 million bucks. So if you died with an estate worth $10 mill, and the exemption was a million, the government would tax the remaining $9 million. If the rate that year was 50 percent, the feds would come a-calling with a tab for $4.5 million. (Can you imagine writing that check?)
That’s the norm in the death tax biz. But this year, for reasons involving compromises and favors and backroom deals from a few years back when Congress was messing with this particular tax, the rate for the estate tax is nothing. Zero. Last year, it was 45 percent. Next year, it will be back with a vengeance at a whopping 55 percent. But this year, nada, zilch and zippo. Congress created a magic year for rich folk to croak, and this just happens to be it.
So Steinbrenner expires in July. His kids, predictably sad and choked up in front of the press, had to be high-fiving themselves behind closed doors until their palms were bloody slabs of hamburger. Because Papa left behind an estate worth a billion dollars. If he’d died last year, the family would have owed Uncle Sam about $450 million. If Big George had hung on until next year, the Steinbrenners would have owed about $550 mill. But Daddy, showing a superb sense of timing, checked out in the magic year of 2010, and in so doing made it possible for his family to not owe one stinking penny. Saving them about a half a billion. Gee. Life’s a bitch.
One wonders how many kids in wealthy families with a single, terminally ill parent have now begun to somehow forget to give the old man his daily fistful of crucially important pills. This December could be a very bad month for old, sick tycoons. They’d better be on the lookout for hostile pillows.