Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Financial Planning > Tax Planning > Tax Reform

Grassley: Act Fast on Estate Tax

By Arthur D. Postal

X
Your article was successfully shared with the contacts you provided.

WASHINGTON BUREAU – A high-ranking Republican is asking Democratic congressional leaders to act quickly to reinstitute the federal estate tax.

“Resolving the estate tax nightmare with real reform is time-sensitive tax legislative business,” Sen. Charles Grassley, R-Iowa., the highest-ranking Republican on the Senate Finance Committee, said Wednesday on the Senate floor.

Today, the estate tax issue is “nowhere on the Senate’s radar screen,” Grassley said. “I urge my friends in the Democratic leadership to put it on the Senate’s radar screen. If we leave the death tax in place in its punitive form in 2011, it will take away jobs, businesses, and people out of rural America.”

Because of provisions in the Economic Growth and Tax Relief Reconciliation Act of 2001, the estate tax has disappeared this year but is set to return to 2001 levels Jan. 1, 2011. In 2001, the exemption was $1 million and the maximum tax rate was 55%. The 2009 exemption was $3.5 million, and the top 2009 tax rate was 45%.

In 2009, the House passed a bill sponsored by Rep. Earl Pomeroy, D-N.D., that would have extended the 2009 estate tax parameters permanently.

The Pomeroy bill failed in the Senate in December, when Republicans refused to give unanimous consent to let the bill come up for consideration on the Senate floor.

The Senate is working on H.R. 4213, a bill that would renew a number of measures, including an unemployment benefits extension and many tax breaks, that expired Dec. 31, 2009.

Lawmakers are talking about doing something about the estate tax as they work on H.R. 4213.

Grassley accused Democrats of “slow-walking” on the issue, to let the $1 million exemption and 55% tax rate go back into effect in 2011 without any need for further congressional action.

Grassley said Sen. Bernie Sanders, Independent-Vt., is leading the “no action” effort.

“His position is that $253 billion in revenue gained from retaining current law is better spent by us in Washington, no doubt spent on what the junior senator from Vermont believes are valuable programs,” Grassley said.

Grassley is working with Sens. Blanche Lincoln, D-Ark., and Jon Kyl, R-Ariz., to push for a $3.5 million exemption and a 35% top tax rate. The chief obstacle has been finding a source of revenue to offset the anticipated drop in estate tax revenue.

Talks aimed at a compromise that would phase in the Lincoln-Kyl levels over a 10-year period broke off several weeks ago because of the revenue offset issue, according to officials at the Association for Advanced Life Underwriting, Falls Church, Va.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.