More Legislative Updates on the Estate Tax

As I have previously discussed, the Republicans and the Senate Democrats both offered new proposals to deal with the estate tax. I discussed how the Senate Democrats offered to set the maximum estate tax rate at 45% and the exemption limit at $3.5 million. In addition, the Democrats wanted to extend the Bush-era tax rates on family income of $250,000 or less. Now, the Senate Democrats have dropped the estate tax provision from the Obama Tax Bill.

The reason for dropping this provision is political. With the election year coming up, the Democrats are hoping to secure a political victory in the area of taxes, especially because the Democrats feel that the tax bill proposed by President Obama does not have the support needed to gain 60 votes in the Senate. Both Senators Jim Webb and Joe Lieberman have reported that they will oppose Obama Tax Bill. Congress plans to vote on the tax bill next week. 

See Manu Raju & Seung Min Kim, Senate Democrats Drop Estate Tax Plan, Politico, July 19, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.