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House Dem proposes estate tax changes
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11/17/11 08:29 PM ET
A senior Democrat on the House tax-writing committee has introduced a bill to overhaul the estate tax.
The bill from Rep. Jim McDermott of Washington would roll estate tax levels back to where they were before changes were made early in the George W. Bush administration.
McDermott bills his legislation as the only proposal from a House Ways and Means member that neither repeals or extend current estate tax levels.
“The U.S. economy and the American people are struggling through one of the worst recessions in our history,” the Washington Democrat said in a statement. “Now is the time to ensure our tax policy is fair and equitable for all Americans, and the estate tax bill that I am introducing today embodies these values.” McDermott’s legislation comes the same day that a coalition of groups pressed the deficit-reducing supercommittee to leave the estate tax out of their talks.
“The current estate tax rate is already hindering family businesses’ survival,” the coalition wrote, also saying that recent changes in estate tax levels have “created major planning problems for individuals hoping to pass their businesses on to the next generation.”
After the 2001 changes to the estate tax, the levy grew to a $3.5 million exemption and 45 percent rate in 2009.
The estate tax disappeared, entirely and temporarily, in 2010, and then was reupped in last December’s tax-cut compromise for two years. Currently, the estate tax rate is 35 percent, and the exclusion $5 million.
Under McDermott’s legislation, the rate would be 55 percent, and the exemption would be $1 million for single taxpayers and $2 million for married couples.
The proposal would also index the exclusions for inflation, and change other provisions in the estate tax – including exemptions for generation-skipping.
The bill from Rep. Jim McDermott of Washington would roll estate tax levels back to where they were before changes were made early in the George W. Bush administration.
McDermott bills his legislation as the only proposal from a House Ways and Means member that neither repeals or extend current estate tax levels.
“The U.S. economy and the American people are struggling through one of the worst recessions in our history,” the Washington Democrat said in a statement. “Now is the time to ensure our tax policy is fair and equitable for all Americans, and the estate tax bill that I am introducing today embodies these values.” McDermott’s legislation comes the same day that a coalition of groups pressed the deficit-reducing supercommittee to leave the estate tax out of their talks.
After the 2001 changes to the estate tax, the levy grew to a $3.5 million exemption and 45 percent rate in 2009.
The estate tax disappeared, entirely and temporarily, in 2010, and then was reupped in last December’s tax-cut compromise for two years. Currently, the estate tax rate is 35 percent, and the exclusion $5 million.
Under McDermott’s legislation, the rate would be 55 percent, and the exemption would be $1 million for single taxpayers and $2 million for married couples.
The proposal would also index the exclusions for inflation, and change other provisions in the estate tax – including exemptions for generation-skipping.
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