WASHINGTON BUREAU — Association for Advanced Life Underwriting officials believe Congress will extend the 2009 estate tax levels to next year before it recesses, but won’t deal with permanent reform until next year.
Tom Korb, a vice president at AALU, Falls Church, Va., commented on the topic in the wake of statements House Democratic leaders made today. House Democrats have pledged to enact legislation before the end of the year that would extend the 2009 tax levels indefinitely.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, has suggested that extending the 2009 estate tax levels is a “must-do proposition,” but he would not commit to a permanent fix this year.
Federal law now allows for a $3.5 million personal exemption and sets the maximum tax rate at 45%.
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Congress wants to act before the end of the year because, if it does nothing, current law will eliminate the estate tax in 2010, then cut the personal exemption to $1 million in 2011 and set the maximum tax rate at 55%.
Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, said after a meeting with committee Democrats that a vote on the estate tax will not occur until “after health care.”
The House must originate tax legislation. Earlier, some had thought that the House could vote on estate tax legislation as early as this week.
Rep. Steny Hoyer, D-Md., House majority leader, said the House would vote before the end of the year to permanently extend the 2009 estate tax level, but he said the vote might not occur until December.
AALU is not optimistic that a permanent solution will occur this year, Korb says in a bulletin sent to AALU members.