Legislative Democrats in the know say that Gov. Jodi Rell wandered into the land of unintended consequences when she proposed eliminating the inheritance tax, which kicks in on estates larger than $2 million and can reach 16 percent on estates larger than $10 million.
On the face of it, the proposal seemed like a 2009 version of the 1991 provision in the income-tax bill that dropped the capital gains tax and therefore attracted Gold Coast support. Rell on Wednesday proposed saving families $257 million in taxes over the biennium by eliminating the state’s death tax. It would be a carrot to go along with the stick of raising income taxes on Connecticut’s wealthiest by more than a billion bucks.
But what troubled, near-bankrupt state institution depends on millions of dollars a year from the inheritance tax? Yep, the Probate Court system, which is the focus of a massive reorganization that will reduce the 117 courts down to 50, supposedly self-sustaining courts, by the time of next year’s elections.
Jeff Beckham, spokesman for Rell’s Office of Policy and Management, just told the Blogster that the death-tax proposal remains alive and well in the realm of active bipartisan budget negotiations. “We will have to work on a revenue stream for the Probate courts,” he said. “That is something we’ll have to do: to make sure the Probate Court have enough resources.”
The Blogster imagines that Republican Probate Court judges, from dozens of high-earning towns like Greenwich, say, getting on the horn, complaining to Rell’s office about how she wants to take away their ability to function.