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House could take up estate tax this week

November 15, 2009

The House could take up the estate tax next week, and Congress Daily is reporting that the safe money is on a one-year extension of the estate tax at the current $3.5 million exemption per spouse and top tax rate of 45 percent.

Moderates are pushing for a permanent extension at the 2009 rate of 45 percent, with an exemption for up to $3.5 million in assets per spouse, as proposed in President Obama’s budget. Liberal House members argue those levels are too generous, however, especially because the $233 billion cost does not have to be paid for under a budget deal struck this year. There is even more dissension in the Senate over the terms and scope of the estate tax, with Democrats such as Agriculture Chairwoman Blanche Lincoln joining Republicans in pushing for a lower rate and higher exemption threshold. A simple one-year extension is seen as a more likely fallback scenario this year.

Illinois Farm Bureau has asked our delegation to cosponsor H.R. 3905, the Estate Tax Relief Act of 2009.  

No, it’s not permanent elimination, but it’s a big step in the right direction.

Congressmen Donald Manzullo and Aaron Schock have cosponsored the bipartisan bill which would raise the individual exemption over the next decade to $5 million and gradually reduce the tax rate from 45 to 35 percent.    At the end of the decade, the exemption would be tied to rate of inflation.

Tax Prof Blog opposes the bill, which is the companion to a proposal cosponsored by Blanche Lincoln and John Kyl in the Senate.

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