When a bill that results in a 35% estate tax winds up being called a “tax relief act” there’s something wrong with the playing field. While it is true that the reduction in the estate tax rate to 35% from the 55% that had been anticipated for 2011 (and the 45% that was in place in 2009) lightens the load a tad we are talking about more than a third of your legacy here after ten million dollars.
Estate planning attorneys have been decrying the unfairness of this tax forever, and some legislators have agreed. Based on recent events that are taking place on Capitol Hill it is not unreasonable to suggest that a permanent repeal of the estate tax is as likely as it has ever been at this juncture.
You definitely see a ray of hope when a member of the United States House of Representatives sees fit to introduce a bill that would repeal the federal death levy. When you see two such bills the glimmer intensifies, but when you see five bills introduced at more or less the same time that would permanently eliminate the federal estate tax you have to feel quite optimistic. This is in fact the reality at this time, as H.R. 86, H.R. 99, H.R. 143, H.R. 177, and H.R. 123 have all been introduced.
All but H.R. 123 call for a repeal of the gift tax and the generation-skipping transfer tax as well as the estate tax, proposing to achieve this through the repeal of Subtitle B (Estate and Gift Taxes) of the Internal Revenue Code. H.R. 123, which has been introduced by Rep. Phil Gingrey (R-GA) would repeal the estate tax by repealing Title III of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and doing away with the sunset of the Economic Growth and Tax Relief Reconciliation Act of 2001. H.R. 123 calls for the gift tax to remain in place with a 35% rate but with just a one dollar exemption