Life insurance industry lawyers and lobbyists are voicing relief that Congress has finally determined long-term estate and gift tax policy, but are now girding for the coming battles over the tax status of a number of industry products.
“The fiscal cliff deal approved by Congress should finally bring some certainty regarding the estate tax, which is what the National Association of Insurance and Financial Advisors has called for all along,” said NAIFA President Rob Smith.
“Knowing what the rules are, NAIFA members can better help their clients plan for future financial security,” Smith said.
He added that, “The new bill also prudently avoids new taxes on life insurance, annuities, pensions, retirement savings and employer-provided benefits.”
And, Smith said, “NAIFA will continue to work with legislators to protect the interests of consumers who rely on life insurance products for financial security as Congress considers comprehensive tax reform later this year.”
Doug Siegler, a partner at Sutherland, Asbill & Brennan LLP, said “there is great relief amongst tax practitioners about this certainty” about estate and gift tax policy.
But, the industry took heed of the floor comments by Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee during House debate on the fiscal cliff legislation that, “With the revenue piece settled, Washington must now turn to solving the rest of the fiscal cliff. …”
NAIFA’s Smith acknowledged that. He said the bill, H.R.8, does not contain instructions or an expedited process for tax and/or entitlement reform in 2013.
However, Smith said, in the next two months Congress will again be tackling deficit reduction due to the expiration of the sequester delay, the need to raise the debt ceiling, and the fact that funding for the federal government runs out in March.
“It is likely there will be a renewed effort to include instructions and an expedited process for tax (and possibly entitlement) reform in this upcoming legislative process,” Smith said.
Furthermore he added, “Even without statutory instructions and/or an expedited process, it is widely expected that tax reform will be among the 113th Congress’ top priorities. Work on tax reform is likely to begin early in the New Year, probably before spring.”