The estate tax expired on January 1, 2010. It remains to be seen whether Congress will reinstate it before it returns in 2011...Read more
Senate Gearing Up for Estate Tax Repeal Vote
- June 2nd, 2006
Senate Republicans are preparing to revive the debate over permanent repeal of the estate tax on June 6, but the real action will be on the Democratic side.
Republicans concede they lack the votes for full repeal, but they are hoping they can work out a compromise that would persuade enough Democrats to exempt the families of many wealthy individuals from paying federal estate tax. Sens. John Kyl (R-AZ) and Max Baucus (D-MT), who is the senior Democrat on the Senate Finance Committee, are reportedly negotiating.
Kyl is proposing increasing the estate tax exemption to $5 million and reducing the top estate tax rate to 15 percent from its current 46 percent.
Currently, only estates worth more than $2 million are taxed by the federal government. The threshold is scheduled to rise to $3.5 million in 2009. For the year 2010, estates will be entirely free from federal taxation. However, the law that includes this provision expires at the end of 2010. Thus, unless Congress acts in the interim, the estate tax exemption will then revert to $1 million.
Baucus is under pressure from fellow Democrats who say that even a compromise would deplete federal revenue by hundreds of billions of dollars and make it more difficult to shore up social programs and balance the budget. According to the Center on Budget and Policy Priorities, reducing the top rate to 15 percent would lose nearly as much revenue as full repeal, which will cost the U.S. Treasury an estimated $1 trillion. The Republicans need Baucus to deliver about a half-dozen Democrats to reach the 60 votes required to overcome any filibuster.
Almost all Democrats support raising the exemption threshold for eligibility to $3.5 million for an individual and $7 million for a couple.
Meanwhile, House Democrats have released a report detailing the effect that a repeal of the tax would have on the estates of oil company executives and members of the Bush cabinet. According to the report, estate tax repeal would save the estate of Vice President Cheney between $13 million and $61 million, and would save the estate of Defense Secretary Donald Rumsfeld between $32 million and $101 million. The family of retired ExxonMobil chief Lee R. Raymond would receive a $164 million windfall.
For the House report, click here.
For more information on estate taxation, click here.
Local Elder Law Attorneys in Ashburn, VA
Felinton Elder Law & Estate Planning Centers
Mindy Felinton concentrates in the areas of Medicaid planning, Veterans' Benefits, asset protection, nursing home planning, elder law, wills, estate planning, trusts, living wills, powers of attorney, probate administration and trust administration and began her legal career 30 years ago as an Assistant State Attorney...
Ron M. Landsman, P.A.
Ron M. Landsman has been practicing elder law since 1983, before it was known as elder law, originally with Landsman and Laster, Washington, D.C., then Landsman, Eakes and Laster, also in Arlington, VA, and since 1990 in his own practice in Montgomery County, Maryland. He has been among the most active members of the...