News & Events
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August 2010
The Latest In The Estate Tax Saga
by Jack S. Johal
Senators Jon Kyl and Blanche Lincoln's proposal to phase in a permanent top estate tax rate of 35 percent and raise the individual exemption to $5 million, indexed for inflation seems to be moribund - at least for now.
The following statement by Sen. Robert P. Casey Jr. is a good indication of the strong position Democratic leaders have taken (who themselves are proposing - rather than let the exemption sink back to a mere $1,000,000 and the estate rate rise to 55 percent) a top rate of 45 percent and a $3.5 million exemption).
"For the life of me I can't understand why those who claim to be fiscally responsible want to have a much more generous tax break for the wealthiest of the wealthy,". "Or I should say, the wealthiest of the extremely wealthy."
The pressure on both parties is definitely increasing. The talk around town regarding George Steinbrenner's "home run" (probably the first time in history that dying was considered good tax planning) is driving people crazy and increasing the pressure on both parties to stop the hemorrhaging of lost revenue.
Finance Committee Chair Max Baucus seems representative of most Democrats who are highly unlikely to vote for any estate tax rate that would significantly reduce the tax lower than it was in 2009 and further increase the cost.
What do the experts state?
- Expect a LOT of rhetoric, posturing, and positioning in the coming months from both parties, including advertisements and editorials by those who have an interest or agenda in the estate tax.
- Nothing will happen on the estate tax issue until at the earliest September and much more likely AFTER THE ELECTIONS.
- When all the dust settles - the top estate tax rate will be between 40 and 45 percent and the exemption will be between $3.5 and $ 4 million.
Please if you have any additional questions.
