Taxation & Estate Planning

Possible Estate Tax Compromise Connected to the Jobs Bill

By michael

Don’t let a lack of political will (or ability!) fool you…  According to this story at The Hill.com, “Senate leaders are working on an estate tax deal to make it easier to move a bipartisan jobs bill.”  These days I’ve taken to pronouncing “bipartisan” the same as “unicorn” but the proposed quid pro quo seems reasonable:

The deal discussed by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) involves moving an estate tax bill through the Senate that would prevent a huge hike in the tax from taking effect in 2011, staffers and lobbyists say.

For Reid, it could provide crucial Republican votes for the jobs bill in a Senate where Democrats now have only 59 votes. Republicans would get a vote on legislation to stop the estate tax from returning to a historically high level.

Exact details of the compromise are unknown as are the details of the jobs bill itself but this is the first significant movement I’ve heard of this month.  Basically, we’d see the return on 2009 rates and exemptions made retroactivley effective to January 1, 2010.

An interesting quote from the article:

What many Republicans would really like is a vote on a proposal by Senate Minority Whip Jon Kyl (R-Ariz) and Sen. Blanche Lincoln (D-Ark.) that was offered during last year?s budget debate. Their legislation would cap the estate tax at 35 percent on estates worth more than $5 million.

That’s interesting because if that’s really what the R’s wanted just a few months ago, and the D’s were proposing the same $5 million exemption with rates at or near 45% (with a portable exemption) then why couldn’t we get this done?  We were so close!  To think we could have avoided the present insecurity and confusion if these damned partisans could have just walked a few steps towards each other.  We were so close.

Thanks to Greg of the North Carolina Estate Planning Blog for pointing this story out this morning.

Full post as published by The Ohio Trust & Estate Blog on February 12, 2010 (boomark / email).