The estate tax law is still undecided. Many Representatives and Senators have proposed different bills from the repeal of the estate tax to much higher taxes on the wealthy. Look at the following variety of proposals:
In April, Representative Mark Kirk (R. Ill.) proposed extending the repeal of the estate tax to December 31, 2015; also, in April, Representative Jim Jordan (R. OH.) proposed a repeal of the estate tax indefinitely along with cutting corporate tax rates plus other tax cuts.
Last month, in May, Representative Mike Thompson (D. Calif. ) proposed exempting farmland as long as farmland was still in use and not developed, with many co-sponsors. Question: Are gas leases and gas wells and pipelines considered development under that proposal?
This month Senator Blanche Lincoln (D. Ark. ) and Senator John Kyle (R. Arizona) proposed a $3.5 million exemption per person with a 45% bracket, and in 10 years the proposal would automatically establish a $5 million exemption per person with a 35% bracket.
On the other end of the spectrum, this month independent Senator Bernie Sanders ( Indep. VT.), along with three Democratic co-sponsors, proposed exemptions at 3.5 million per person with a 45% bracket (as in 2009), but estates with taxable assets between $10 million and $50 million would pay 50% rate, and estates in excess of $50 million would pay a 55% rate, and a further surtax of 10% for estate in excess of $500. Also, this is proposed to be retroactive to January 1 of 2010. Such retroactivity would cause a great deal of litigation by the many millionaires’ estates that have died since January and have incurred no estate tax under the current law. Such litigation would cause a couple of years delay to clarify the law for estate planners.
As we discussed previously, it should be interesting to see if any law regarding estate tax is passed prior to the end of this year; and of course if there is no change then, automatically, on January 1, 2011, the exemptions will be at $1 million per person with a 55% rate.