The Senate voted early today to make the current estate tax policy permanent, with one minor change, bringing closer to the end more than a decade of uncertainty for government policy dealing with a key insurance industry product.
The interim deal to avoid a so-called “fiscal cliff” was passed by the Senate 89-8 at 2 a.m. Tuesday.
The House will convene at 1 p.m. to consider the bill. Republican leader Eric Cantor of Virginia told Reuters that it remained to be decided whether the House would vote on the plan.
See our follow-up coverage: House passes fiscal cliff deal
The plan would raise income taxes on single earners with annual incomes above $400,000 and married couples with incomes above $450,000.
It would also block spending cuts for two months, extend unemployment benefits for the long-term jobless, prevent a 27 percent cut in fees for doctors who treat Medicare patients and prevent a spike in milk prices.
“The Association for Advanced Life Underwriting is very pleased that the agreement brings permanence and certainty to the estate tax regime — which we have been advocating for over the last decade,” said David Stertzer, AALU president and CEO.
Under the agreement, U.S. estate tax law will provide a $5.12 million per-person exemption. The deal raises the highest tax rate from 35 to 40 percent but continues the current policy of reunifying the estate and gift taxes. All other current policies related to the estate tax will also remain in place.
“This provides a key tool for business succession planning, and helping preserve jobs and economic investment in the process,” Sterzer said.
“This is the culmination of a great deal of work by the AALU and industry partners, our members and volunteer leaders to educate Congress on the importance of effectively resolving this issue.”