Update: Estate Tax Bill - More Uncertainty

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With the upcoming lame duck session watchers on the Hill are not sure what is going to happen with the estate tax legislation, or perhaps I should say lack of legislation.  If you are a reader of the AW Blog you know how many times I have posted on this topic, and how many starts and stops I have reported.

Unfortunately there is still no solid information or consensus on what or if anything will happen before the end of the year.  It appeared to have been close, then too much debate over the Bush tax cuts pushed any decision further back into late 2010.

The Hill is reporting on estate tax Legislation

One issue is how to stop the estate tax from returning to pre-2001 levels, which means estates worth more than $1 million are hit with a tax that could be as high as 55 percent.

The levy is currently repealed but, barring congressional action, it will return next year to the aforementioned level. Republicans and more than a few Democrats oppose returning to pre-2001 law, but there doesn’t seem to be a consensus for how the tax should be modified.

“Unfortunately, I think there is a pretty good chance that they just run it out and let [the repeal] expire,” said Phil Kerpen, vice president of policy at Americans for Prosperity.

Democratic lawmakers were supposed to have wrapped an estate-tax fix in legislation extending the middle-class tax cuts enacted under President Bush.

Sources close to the matter said the fix resuscitated 2009 law, which placed a 45 percent tax on estates exceeding $3.5 million. The levy would be indexed for inflation so fewer people would become ensnared by it.

But Democratic leaders opted to delay action on the Bush-era tax cuts until after the election, thereby punting a resolution on the estate tax into the lame-duck session.

“Inaction is certainly possible, particularly in the lame-duck, which tend to be unproductive,” Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, told The Hill. “We certainly saw last year that inaction is possible.”

Lawmakers last year vowed to fix the estate tax before January of this year, but then blew past the deadline and promised that the situation would be addressed in the new year. Ten months have passed and Democrats still have not resolved the issue.

To read the full article from the Hill, click HERE.