Estate Tax Legislation Falters

I spotted a post on a LinkedIn group about current estate law bills being considered as reported by The Hill.  Although the Senate bill has faltered, it does show the direction and levels being considered.

In summary, The Hill (click to read)  is reporting that a proposal by Senate minority whip Jon Kyl (R Arizona) to pass a bill for estate tax in the Senate has failed.  Although details of the plan were not officially announced, it was reported that Kyl wanted to see an exemption level of $3.5 million and a 35% tax for estates above that level.  There was also speculation the $3.5 million exemption level would not be effected by inflation, but would possibly move to a $5 million exemption level at some point in the future.  There were also discounts for pre payments.

There was not any notation in the article on the law being retro active, and supposedly fell within the guidelines of the pay as you go rules in Congress. The reason for the breakdown is that Senate democrats are not allowing bills to the floor unless there is a majority of democrats backing the bill. It appears that Republican Kyl was not able to get the necessary number of democrats to back the bill.

The House had passed a bill with a $3.5 million exemption and a 45% levy.  If the Senate bill passed, then the two bills would be reconciled and a final estate tax bill would be passed.  Negotiations continue and I will post as I get additional information on the status of the estate tax.