It's only been three days since Barack Obama won the presidential race, and I'm already weary of reading the words "one of the critical issues facing the president-elect will be …" So I'm going to move that paragraph to the end of this column and get right to the point.

What if I told you that a change in the federal estate tax, slated for next year, will save lives?

Your first reaction might be "Jeesh!--that's typical libertarian anti-tax hysteria." And I agree. But the impending increase in the exemption from its current $2 million to $3.5 million--a substantial leap--will do just that. It's all a question of incentives.

Economists take it as foundational that people's behavior changes when prices change. In analyzing tax policy, this translates into the argument that taxing certain things or behaviors is just like raising the prices for them. And higher prices then create incentives to avoid or cut back on those things or behaviors.

This makes lots of sense when it comes to something like boosting taxes on cigarettes to discourage smoking. But does this hold true for behaviors like dying? Well, my all-time favorite piece of academic research says yes.

Economists Joel Slemrod and Wojcieh Kopczuk ask the ultimate question on economic incentives: Can people time their deaths to take advantage of changes in the tax code?

To answer that question, they looked at federal tax returns for the two-week period bookending major changes in the estate tax. During the period 1917 to 1984 there were 13 such changes--eight involved tax hikes, and five involved tax cuts.

What they found was sort of stunning.

If the tax change involved an increase in the estate tax, then the probability of a person dying before the tax increase went into effect increased. If the tax change involved a decrease in the estate tax, then it was more likely that a person would die after the decrease went into effect. Even more interesting, it seems that dying people respond more strongly to coming tax cuts than to hikes. The probability of death occurring just after a tax reduction was greater than the chance of dying just before an increase.

Simply put, people can either postpone or accelerate their dying if it'll save money for their heirs. This generous impulse is exhibited equally by men and women, old and not so old, married and single.

I know this sounds rather ghoulish, but there's lots of evidence that people time their deaths around special occasions. Who hasn't heard stories about dying people postponing the inevitable in order to mark important anniversaries or to find out who wins the World Series? Or to have a birthday party? (Here I should tell you that women seem to be more adept at postponement than men. A recent study of over 2 million deaths from natural causes found women were more likely to die after a birthday and men before a birthday. Go figure.)

But there's also statistical evidence showing that Moslems delay death to observe Ramadan, Chinese to celebrate the Harvest Moon Festival and Jews to commemorate Passover.

To be really ghoulish--and honest--I should concede that timing a death to avoid taxes may also involve clever doctoring. I could suggest that sometimes the person making the pull-the-plug decision is an heir with massive incentives to receive the largest possible after-tax estate. And I could even suggest that, like the practice of backdating stock options, dating death certificates may be a term of art--not fact.

OK. So maybe I've overstated the impact of the coming reduction in the estate tax on saving lives. As Ralph Waldo Emerson might have said, death comes to all--whether or not it is a taxable event.

Even though death may enjoy the final victory, it's nice to know that motivated people can take out some of the sting. Especially when the tax savings, in the case of the coming January change, could be enormous.

And oh, here's that dreary paragraph:

One of the critical issues facing the president-elect will be what to do about the death tax. Next year the exemption rises to $3 million, in 2010 the tax disappears entirely and then in 2011--if nothing is done--it reverts to the bad old days with an exclusion of only $1 million and a rate of 55%. During the campaign, Obama proposed keeping the exclusion permanently at $3.5 million along with the current 45% tax rate. But intense need for federal revenue may be a mind-changer.

Susan Lee is a weekly columnist for Forbes.com.

http://www.forbes.com/opinions/2008/11/06/obama-taxes-estate-oped-cx_sl_1107lee.html