Update: Estate Tax Bill

The Hill has a good article on the current Estate Tax law bills that are floating around Washington DC.  There are many different proposals and compromise bills, and it appears many lawmakers and trade groups want to re-instate some form of estate tax.  It is appears there will be a new estate tax so we should not see the reversion to the extremely high rates from 10 years ago. The question is of course at what tax  rate (some form of incremental level increase based upon the size of the estate) and exemption will the new law allow.

This Hill article gives a brief overview of what is going on and the main players.  The article states the time to pass a new estate tax bill is now, before the summer recess is August, as taxes are too much of hot button issue to be considered during fall elections.

The Hill states

Both Rubin and Trumka said restoring the tax would be “sound policy.”

“You would actually increase demand, not decrease demand, if you restored the estate tax immediately,” Rubin said.

Trumka said the government revenue could be used as aid to state and local governments or infrastructure projects as well as for reducing the deficit.

“Anyone who is for deficit reduction but is opposing reinstating the estate tax is clearly residing on a different planet than working people who are struggling in this economy right now,” Trumka said.

Concerned that a more burdensome estate tax could be imposed, business associations as well as trade groups for ranchers and farmers have gotten behind a compromise bill sponsored by Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.).

That proposal would institute a tax rate of 35 percent and an exemption level of $5 million for the estate tax.

In a letter Tuesday to senators, the Family Business Estate Tax Coalition (FBETC) asked that the Lincoln-Kyl measure be attached to a small-business lending bill that is likely to move through the Senate.

The coalition is typically for full repeal of the estate tax, but such a bill would receive little support in a Democratic-controlled Congress.

Click HERE to read the full article.