More on the Billionaire’s Estate Tax

Independent and Democrat Senators proposed an estate tax plan on Thursday, which I previously blogged about in detail.

What I didn’t mention, however, is that this proposal would be retroactive to January 1, 2010. The heirs of Dan Duncan (previously-mentioned Texas billionaire) will surely challenge the retroactive law, which would subject the majority of Duncan’s estate to a 65% rate.

Another option, proposed by Senators Lincoln (D-AR) and Kyl (R-AZ) would not be retroactive. This plan provides for a $3.5 million exemption and a 44% rate for anything on top of that. After a 10-year phase-in period, there would be an exemption of $5 million and a 35% rate.

See Laura Saunders, Sanders Estate-Tax Proposal Would Hit Wealthy Harder, W.S.J., June 25, 2010. See also Janet Novack, Three Senators Call for Billionaire Estate Surtax, Forbes.com, June 24, 2010.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this to my attention.