As we know this past December the House of Representatives passed a bill to continue the estate tax law as in 2009 with a $3.5 million exemption; however, because of the healthcare discussions the Senate never reviewed that House bill. As we discussed in our blog throughout this year many Senators and Congressmen have proposed legislation for both higher exemptions and lesser rates and lower exemptions and higher rates. Congress has failed to act on any of these proposals.
Most recently, last week, Senators Kyle and Blanche tried to add their proposal of a $3.5 million estate tax exemption and a 35% tax bracket, adjusted for inflation, to the small business bill and it was rejected by the Democratic leaders.
At this point some believe there will be legislation in November and December but most believe that we better get ready on January 1 for a $1 million exemption and a 55% bracket. This will hurt many pocketbooks and affect a great deal of the estate plans.