Estate Tax Compromise On the Cards

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

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.


The New York Sun

© 2024 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

By continuing you agree to our Privacy Policy and Terms of Use