Kyl hasn't disclosed the proposal's details, but sources have told The Hill that lawmakers were looking to give taxpayers the option of prepaying their estate tax. The levy would be set at 35 percent for those worth more than $3.5 million. However, the exemption would ultimately increase over time to $5 million and wouldn't be indexed for inflation. Prepayment trusts would pay a lower rate.
The proposal was expected to be fully compliant with pay-as-you-go rules.
It was unclear how the gift tax would be addressed but Kyl has said he would like the rate to mirror the estate tax.
The House recently passed legislation creating a 45 percent tax on estates worth more than $3.5 million.