Reaching the age of retirement and becoming eligible for government-funded pension benefits is a cause of celebration for many individuals. However, for Americans who wish to exercise their Second-Amendment right to bear firearms, turning 65 may not be as happy an occasion as it once was.
American citizens become eligible for full Social Security benefits upon reaching the age of 65. President Obama has recently announced plans to limit the ability of recipients of Social Security benefits to obtain and retain possession of guns.
If the proposed change is implemented, background checks conducted when individuals purchase guns will include a review of Social Security records. Further, firearm registries may be reviewed to ensure that certain recipients of Social Security in possession of guns are identified and their weapons are confiscated. The change in policy also impacts individuals who suffer from mental illnesses, who also receive social benefits.
President Obama has stated that the intention is to target individuals who fall under the federal firearm laws description of having “marked subnormal intelligence, or mental illness, incompetency, condition, or disease.” However, approximately 4.2 million American adults receive benefits through Social Security that are managed by another person. These people will be unable to purchase or possess firearms, despite the fact that not all of the individuals will fit into the target group of those whose access to guns is considered unsafe.
The issue in the proposed administrative change is that a person may receive assistance from another person in the administration of his or her affairs without having compromised mental capacities. Critics of President Obama’s plan insist that seniors are a vulnerable group of society who are most likely in need of guns to protect themselves due to age-related decline in physical strength and increased frailty. The inability to possess firearms is suggested to improperly compromise their constitutional right on the basis of age.
While this development in unlikely to affect the lives of Canadians, it is an example of the infringement of rights of the basis of age, whether or not justified by increased rates of cognitive decline, and it will be interesting to see whether the proposal withstands further review.
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Yesterday I wrote about Edward Kennedy – I began to wonder about the tax implications on his estate.
Assuming he held $75 million in assets, his estate would have been taxed at a rate of 45% and the bill owing would be $33,750,000. But this is unlikely because much of his wealth was held by trusts which, in Ontario, are separate taxable entities.
My colleague, Sarah Fitzpatrick wrote in July 2008 about the upcoming changes to the U.S. tax law. That time is four months away. Congress must act soon; if it does not, taxes on nearly everyone will soar under a plan enacted in 2001 called the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) which provides that in 2011 the tax law that had been in effect in 2000 will reappear.
The estate tax is set to vanish for a year if nothing happens before the end of 2009 as the EGTRRA sunsets in 2010. In 2011, an effective rate of 55% on estates would come into effect.
Only a small number of individuals pay the estate tax each year. In 2007, there were 36,458 estate tax filers – out of 235 million total tax filers that same year in the United States. . Smaller estates (under $3.5 million) make up the bulk of filers – over 60 percent in years 2002-2007. Large estates (over $10 million), however contributed between 18 and 30 percent of the total revenue in the same time frame.
During the 2008 campaign, President Barack Obama supported permanent extension of the 2009 law – effectively a permanent 45 percent top rate with $3.5 million exemption per individual ($7 million for couples).
Either side of the political spectrum will present different numbers, but what seems certain is that if there is no legislative action in the U.S. in the next few months, 2010 will be a good year for estates. My bet is that the large loophole will be filled quickly, especially as the U.S. operates with a large deficit.
Thank you for reading. Please remember that Hull & Hull is hosting another breakfast seminar tomorrow morning.
Enjoy your Wednesday.
Jonathan Morse – Click here for more information on Jonathan Morse.