Thursday, July 19, 2012
Republicans and Democrats are ready to begin the fight over the fate of the estate tax. Both parties have drafted their own proposals and are ready to begin the debate. Unfortunately, a stalemate is not in the question here. If both parties fail to come to an agreement, then the estate tax will revert to pre-2009 levels. This means that the exemption limitation will be set at $1 million dollars, and the tax rate would be set at 55%.
The Republicans would like to abolish the estate tax; however, that course of action would probably not succeed. The GOP has proposed an alternative course of action. The Republicans would like to extend the Bush-era estate tax rates and exemption. In other words, the GOP wants to maintain the current estate tax. The Senate Democrats are offering to set the maximum estate tax rate at 45% and the exemption limit at $3.5 million. In addition, the Democrats want to extend the Bush-era tax rates on family income of $250,000 or less. Based upon these numbers, the Republicans have offered the most favorable tax rate and the failure to pass any measure who offer the worse tax rate.
See Bernie Becker, Groups Push to Rein in Estate Tax, The Hill Blog, July 17, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.