House Approves Charitable Reforms and Giving Incentives... And a Reduction in the Estate Tax
Late on Friday night, the House approved a scaled-back package of charitable reforms and incentives as part of pension reform legislation (H.R. 4). A summary of the package is available here.
H.R. 4 now heads to the Senate for consideration where passage is far from certain. Because the bill is not a conference report, it is subject to amendment and potentially unlimited debate (i.e., normal order in the Senate). In addition, Majority Leader Frist has indicated he will allow a vote on H.R. 4 only AFTER the Senate approves another bill (H.R. 5970), which contains billions of dollars of tax extenders, minimum wage provisions and a permanent reduction in the estate tax.
It's that pesky reduction in the estate tax, of course, which threatens to derail progress of both H.R. 4 and H.R. 5970. Specifically, the legislation approved by the House and now headed to the Senate would increase the estate and gift tax exemption amount to $5 million per person, fully-phased by January 1, 2015. The legislation would also lower the rate of tax on estates up to $25 million to the capital gains tax rate (currently at 15 percent, set to increase to 20 percent in 2011 unless extended). Estates in excess of $25 million will be subject to a phased-in reduced rate of tax of 30 percent, also fully-phased in by January 1, 2015. A summary of the estate tax provisions approved by the House is available here.
Votes on H.R. 4 and H.R. 5970 are expected in the Senate later this week.
H.R. 4 now heads to the Senate for consideration where passage is far from certain. Because the bill is not a conference report, it is subject to amendment and potentially unlimited debate (i.e., normal order in the Senate). In addition, Majority Leader Frist has indicated he will allow a vote on H.R. 4 only AFTER the Senate approves another bill (H.R. 5970), which contains billions of dollars of tax extenders, minimum wage provisions and a permanent reduction in the estate tax.
It's that pesky reduction in the estate tax, of course, which threatens to derail progress of both H.R. 4 and H.R. 5970. Specifically, the legislation approved by the House and now headed to the Senate would increase the estate and gift tax exemption amount to $5 million per person, fully-phased by January 1, 2015. The legislation would also lower the rate of tax on estates up to $25 million to the capital gains tax rate (currently at 15 percent, set to increase to 20 percent in 2011 unless extended). Estates in excess of $25 million will be subject to a phased-in reduced rate of tax of 30 percent, also fully-phased in by January 1, 2015. A summary of the estate tax provisions approved by the House is available here.
Votes on H.R. 4 and H.R. 5970 are expected in the Senate later this week.
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