Estate Tax “Tremendous Upheaval” Predicted
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On June 2, 2010, Senator Charles Grassley (R-IA) offered reporters his view on the uncertain future of the estate tax. Grassley is the ranking Republican on the Senate Finance Committee.
From today’s GiftLaw eNewsletter: In December of 2009, the House passed the Permanent Estate Tax Relief for Families, Farmers and Small Businesses Act of 2009. This makes permanent the 2009 estate exemption of $3.5 million and top estate tax rate of 45%. If the House and Senate are not able to take action on estate taxes by the end of 2010 then on January 1, 2011 the estate tax returns with a 55% top rate and an exemption of $1 million (plus indexed increases). If this were to happen, Sen. Grassley stated that there will be a “tremendous upheaval at the grassroots of America.”
Sen. Grassley noted that Sen. Jon Kyle (R-AZ) and Sen. Blanche Lincoln (D-AR) have proposed that the Senate Finance Committee pass an estate tax bill with a $5 million per person exemption and a 35% top estate tax rate. However, Grassley expressed the opinion that “the Finance Committee would like to take up consideration of legislation, but we aren’t assured by the majority leader that the bill passed out of committee will be taken up on the floor.”
Under the Senate rules, even if the Finance Committee were to pass the Kyle-Lincoln estate tax compromise, Majority Leader Harry Reid (D-NV) is not obligated to schedule a floor vote and could simply stall the legislation.
In my view, Grassley’s statement about the upheaval is ludicrous. The folks who constitute America’s “grassroots” are not millionaires. Even with a $1 million exemption, proper planing can reduce or eliminate estate taxes for those with far more than $1,000,000. Stop whining and start focusing on something that will really help our country. That’s my 2 cents on this Saturday afternoon.
