Estate Tax Compromise On the Cards

WASHINGTON – Some of the staunchest advocates of eliminating estate taxes said yesterday that they could accept, with some reservations, a compromise that stops short of complete repeal.The reduction under consideration, scheduled for House debate today, rewrites estate tax rates in 2010 and beyond. It responds to a quirky and temporary law, part of President Bush’s first tax cut, that erases estate taxes in 2010 and revives them a year later.The chairman of the House Ways and Means Committee recommended rewriting that law by exempting $5 million of an individual’s estate, and $10 million of a couple’s, from taxation beginning in 2010. The proposal by Rep. Bill Thomas, a Republican of California, would let a surviving spouse use any unused portion of an exemption left by a deceased spouse.Under that plan, an estate worth up to $25 million would be taxed at capital gains rates, currently 15% and scheduled to increase to 20% in 2011. Estates worth $25 million or more would be taxed at twice capital gains, currently 30% and increasing to 40%.Some farm and business advocates said they could accept the proposed estate reduction because it will make family financial planning easier.“Our members would like something to happen this year,” a tax specialist at the American Farm Bureau Federation, Pat Wolff, said. “Now is the time to talk compromise if you want something to be done.”The House’s most conservative Republicans agreed that some reduction in estate taxes was better than no reduction. Rep. Mike Pence, a Republican of Indiana, said that if the proposal “moves a little bit in the direction you want to go, that’s progress.”He and others worried that the Senate may not accept the House bill, but instead could use it as the starting point for further negotiations.

Estate Tax Compromise On the Cards

Estate Tax Compromise On the Cards

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