New House Bill Would Reform Estate Tax

Charlie Rangel, House Ways and Means ChairmanOn October 22nd, a bill to permanently extend the federal estate tax for 2010 and beyond was introduced by a bipartisan group of Congressional Representatives. All four Representatives are also members of the House Ways and Means Committee – the tax-writing committee in the House. The bill would rescind 2010’s scheduled repeal of the estate tax. In addition, over the next ten years, the bill would increase the federal estate exemption amount and reduce the top estate tax rate as indicated in the table set forth below:

YEAR

 

EXEMPTION

 

RATE

  

AMOUNT

  

2009

 

$3,500,000

 

45%

2010

 

$3,650,000

 

44%

2011

 

$3,800,000

 

43%

2012

 

$3,950,000

 

42%

2013

 

$4,100,000

 

41%

2014

 

$4,250,000

 

40%

2015

 

$4,400,000

 

39%

2016

 

$4,550,000

 

38%

2017

 

$4,700,000

 

37%

2018

 

$4,850,000

 

36%

2019 or thereafter

 

$5,000,000

 

35%

After 2019, the $5 million exemption amount would be indexed for inflation. While the introduction of such legislation is often the last time it sees the light of day, the fact that a bipartisan group (two Democrats and two Republicans) introduced the legislation, combined with their common membership on the Ways and Means Committee, may give the bill some traction. Ultimately, Ways and Means Chairman Charlie Rangel will be instrumental in deciding the nature of any legislation that moves out of the committee. Stay tuned!

I welcome your comments and questions!

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