Current law provides for one year of estate tax repeal (in 2010) and then in 2011 returns estate tax rules to a 55% top rate and a $1 million exemption. On March 13, 2008, the Senate overwhelmingly approved an amendment to its version of a Congressional budget that would authorize tax legislation to permanently reform the estate tax at a $3.5 million per individual exemption ($7 million for a married couple), and a 45% top rate. The vote was 99 to 1. Senators rejected two other estate tax amendments – each crafted slightly differently, but both with $5 million per individual exemptions ($10 million married), and a 35 percent top rate.
The budget is not binding and it is not law. Inclusion in the budget establishes a sense of what the Senate thinks it would approve (particularly in light of the 99 to 1 vote by which it passed). But it does not guarantee it will be enacted into law. Of course, time will tell. The only votes that will really count in connection with reforming the estate tax are the ones on the actual bill that goes to the Senate floor (if there is one), probably this fall or perhaps even not until next year.
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