The U.S. House of Representatives passed SEMA-supported legislation to make permanent the 2009 estate tax rate of 45% and exemption rate of $3.5 million/individual ($7 million couple). Under President Bush’s tax cuts of 2001, the so-called “death tax” is being gradually phased-out by 2010.
However, absent any congressional action, it will then reappear in 2011 under its previous 55% tax rate on anything above $1 million. SEMA joined with a number of other associations to form the “Permanent Estate Tax Relief Now Coalition.” The coalition is urging the Senate to index the tax exemptions for inflation when it takes up the measure. The coalition would also support a higher exemption rate (e.g. $5 million/individual) and lower tax rate (e.g. 35%) as has been proposed by several lawmakers from both political parties. However, the proposal’s challenge has been to remain budget neutral as tax revenues are reduced.
For more information, contact Stuart Gosswein.