The Sensible Tax Act of 2008

On July 15, 2008, Rep. James McDermott [D-WA] introduced into the House The Sensible Tax Act of 2008.

Here are some of the highlights of this bill:

• The estate tax applicable exclusion amount would be set at $2,000,000 and subsequently adjusted for inflation.
• Marginal tax rates would increase to 55% for estates over $10,000,000.
• Repeal of state estate tax deduction.
• Reinstatement of state estate tax credit.
• Reinstatement of a “unified” tax for inter vivos gifts and at-death gifts (that is, the applicable exclusion amount for inter vivos gifts would be $2,000,000 with inflation adjustments).
• The applicable exclusion amount would be increased by any unused applicable exclusion of a predeceased spouse.

Special thanks to Adam Hirsch (William and Catherine VanDercreek Professor of Law, Florida State University) for bringing this bill to my attention.