"Death Tax" Bill Might Rise From the Dead
Reports this week are that Republican leaders in the Senate, mainly Majority Leader Bill Frist (Tennessee) and Finance Committee Chairman Chuck Grassley (Iowa), are planning to revive estate tax legislation before the mid-term elections in November. Perhaps they’re hoping third time’s the charm...
As you’ll recall, in late July, the House approved legislation (H.R. 5970) that would have permanently reduced the estate tax. Specifically, H.R. 5970 would have increased the estate and gift tax exemption amount to $5 million per person and $10 million per couple, fully-phased by January 1, 2015, and lowered 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 would have been subject to a phased-in reduced rate of tax of 30 percent, also fully-phased in by January 1, 2015.
When H.R. 5970 moved to the Senate earlier this month, though, it didn’t fare so well. The Senate failed to invoke cloture on the bill, so a vote on final passage could not take place. Two months earlier, on June 8th, the Senate failed to invoke cloture on another estate tax bill (H.R. 8).
Despite these two defeats, we’re now hearing that Sens. Frist, Grassley & Co. will try once again to permanently reduce the estate tax. They are using the August recess to regroup and craft a compromise proposal that can win the support of at least some Democratic Senators. Potential targets include Sens. Akaka (Hawaii), Baucus (Montana), Byrd (West Virginia), Cantwell (Washington), Inouye (Hawaii), Johnson (South Dakota), Murray (Washington), Pryor (Arkansas), Salazar (Colorado) and Stabenow (Michigan).
We’re not exactly sure yet what this compromise might look like, but details should emerge soon.
As you’ll recall, in late July, the House approved legislation (H.R. 5970) that would have permanently reduced the estate tax. Specifically, H.R. 5970 would have increased the estate and gift tax exemption amount to $5 million per person and $10 million per couple, fully-phased by January 1, 2015, and lowered 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 would have been subject to a phased-in reduced rate of tax of 30 percent, also fully-phased in by January 1, 2015.
When H.R. 5970 moved to the Senate earlier this month, though, it didn’t fare so well. The Senate failed to invoke cloture on the bill, so a vote on final passage could not take place. Two months earlier, on June 8th, the Senate failed to invoke cloture on another estate tax bill (H.R. 8).
Despite these two defeats, we’re now hearing that Sens. Frist, Grassley & Co. will try once again to permanently reduce the estate tax. They are using the August recess to regroup and craft a compromise proposal that can win the support of at least some Democratic Senators. Potential targets include Sens. Akaka (Hawaii), Baucus (Montana), Byrd (West Virginia), Cantwell (Washington), Inouye (Hawaii), Johnson (South Dakota), Murray (Washington), Pryor (Arkansas), Salazar (Colorado) and Stabenow (Michigan).
We’re not exactly sure yet what this compromise might look like, but details should emerge soon.
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