The Senate voted to reject Democratic Sen. Max Baucus' proposal to increase the existing 35% gift tax to 45% for transfer until the end of the year, Bloomberg reported Saturday.  

Bloomberg notes that there's a chance the proposal could still become law as part of a compromise on the Bush tax cuts.

Baucus proposed to "reinstate the estate tax retroactively for 2010" with the 45% rate and increase the individual tax-free allowance to the 2009 level of $3.5 million, which would be increased to adjust for inflation in 2011.

If the bill is enacted, gifts made after Dec. 2 would be subject to the 45% rate, according to Bloomberg.

The estate tax expired for 2010 only, Bloomberg reports, and Americans with estates worth more than $1 million can expect to pay a 55% rate in 2011.

Carol Harrington, head of the estate planning group at a Chicago-based law firm McDermott Will & Emery LLP, told Bloomberg the increase in rates could stop gifts altogether, and that "effectively give up revenue by stopping year-end gifts."