New Proposal for Estate Tax Relief

WASHINGTON – United States Senator Mary Landrieu, D-La., announced that she is introducing a bill to bring relief and reform to the federal estate tax system. Under Sen. Landrieu’s proposal, 99.99 percent of Louisiana residents would no longer be subject to any federal estate tax whatsoever and there would be a rate cut for those who would still have a tax liability.

“This is a plan that has a chance to pass Congress,” said Sen. Landrieu, who added that she hopes the plan will serve as the blueprint for future Congressional debate and compromise on the issue.

“Unlike the current law, my plan is clear, simple and fair,” she said. “It gives most opponents of the estate tax what they want: a significant tax cut. It gives most reformers what they want: a stable and predictable system that enables long-term estate planning. It gives most small business people and farmers what they want: a chance to keep what they have built up in their families over a lifetime of hard work. And it does all of this in a way that is fiscally responsible.”

“How can people do wise and informed estate planning under the current system, which is unstable, uncertain and unfair?” Sen. Landrieu asked. “We need certainty. We need reform. And we need relief. I think my proposal lays a clear, balanced path to each.”

Under Sen. Landrieu’s Estate Tax Relief and Reform Act of 2006, the federal estate tax exemption level would be set at $5 million per person and $10 million per couple. The current exemption is $2 million per person but falls to $1 million in 2011.

“By dramatically raising the exemption, we will effectively get most people of Louisiana out of the tax altogether and forever,” Sen. Landrieu said. “This is especially beneficial for many small business owners and family farmers.”

The current estate tax only applies to about two percent of estates nationwide, so the “relief” only helps a very small percentage of the population.  With the Democrats likely to regain control of Congress, I don’t think Senator Landrieu can count on her proposal passing.  It’s ironic that she feels the citizens of her state should be freed from the burden of the estate tax after she requested $250 billion in Hurricane Katrina relief last year.