Senate Majority Leader Bill Frist has again taken a leadership role in attempting to make deep cuts in the Estate Tax. His latest attempt was cut short in early August when proposed cuts were linked to an increase in the minimum wage, in hopes of getting additional democratic support. While this latest attempt fell short, supporters of the cuts made it clear that they will be back to try again after Congress resumes work in September.
The version of the bill that passed the House July 29th, increased through a phase in, the estate and gift tax exemption to $5 million per person effective Jan 2015, and indexes it for inflation thereafter. The bill also proposed changes to the tax rates applicable to estates beyond the exemption, with estates up to $25 million being taxed at a 15% rate while estates beyond $25 million, would be taxed at 30%.
This “compromise” bill is the latest attempt by the Senate, after a complete repeal post 2010 was voted down in June. Despite these setbacks, Bill Frist has made it clear that he plans to continue to tie legislation looking for deep cuts in estate taxes to other popular benefits and tax breaks, and if necessary the minimum wage again.
So while we don’t know exactly when, or by how much, estate tax changes will be implemented, it does seem that some level of change (increases in unified credit and decreases in rates) is inevitable. |
Estate Tax Revised
– by Matt Schulte, CLU, ChFC, CFP® 
