House Panel Chair Has Eye On Estate Tax

Levin has suggested that the House continues to prefer to see the estate tax stay at 2009 levels, with the 2009 levels retroactive to Jan. 1.

Some in the Senate oppose retroactive reinstatement of the tax. Levin says he is open to a compromise that would allow taxpayers to choose instead to pay a lower capital gains tax rate on wealth inherited this year.

Spear says she believes key senators would put up considerable opposition to that kind of compromise.

“It has not yet been demonstrated that there are 60 votes for either $3.5 million/45% or the $5 million/35% level that several moderate Democrats voted for in the fiscal year 2010 budget debate,” Spear says.

The need to come up with revenue to pay for implementing some of the provisions of the big health bills will further complicate matters, Spear says.

“We expect the debate to continue to play out this year and hope to have clarity in the coming weeks as the Senate turns to the budget,” she says.

The insurance industry supports having the exemption be somewhere in a range of $3.5 million to $5 million and the maximum rate be in the neighborhood of 35% to 45%.

The industry also is seeking to have the exemption level indexed for inflation.

Other provisions sought by the industry are the reunification of the estate and gift tax and providing so-called “portability,” which would permit a surviving spouse to carry over any credit left over by the first spouse to die.