Estate Tax Reform
Senate Finance Committee Chairman Max Baucus (D-MT) may propose legislation to increase the Estate Tax by preventing it from disappearing in 2010, and keeping it at the current rate of 45 percent on all inheritance valued over $3.5 million. In effect, this is a 45 percent increase in the Estate Tax for 2010. In 2011, the tax is scheduled to return to previous levels of as high as 55 percent, and in certain cases 60 percent, due to the statutory 5 percent "bubble tax" for higher estates.
This Estate Tax issue will likely be taken up just after the August recess, which gives forest landowners an excellent opportunity to contact their members of Congress while they are at home on recess in their states and districts. Although Estate Tax repeal is the ultimate goal of FLA, at this point it is unlikely. The best likely scenario is Estate Tax reform moving toward a later repeal, featuring a 35 percent rate and a $5 million exemption in 2010. This would increase the Estate Tax rate up from 0% in 2010, but would also reduce the 2011 rate by at least 20%, and increase the exemption by $4 million. The 35% and $5 million deal is expected to be submitted by Senators Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) in September.
Ask your U.S. Senators to oppose the Senator Baucus legislation and support the Kyl/Lincoln deal of 35% maximum and a $5 million exemption.
Visit FLA's Legislative Action Center to find your members of Congress.