WASHINGTON BUREAU — H.R. 4154 — a bill that would make the 2009 estate tax level permanent — is set to come to the House floor Thursday.
The bill, introduced by Rep. Earl Pomeroy, D-N.D., would keep the 2009 estate tax rate of 45% and the current $3.5 million-per-person exemption.
Under existing law, established by the Economic Growth and Tax Relief Reconciliation Act of 2001, the estate tax is set to go away in 2010, then return in 2011 with a 55% tax rate and a $1 million-per-person exemption.
The Pomeroy bill is a bare-bones piece of legislation. It does not contain some provisions sought by insurers and estate planning experts, such as a provision that would index the exemption level for inflation.
Other provisions left out include the reunification of the estate and gift tax and a provision that would provide "portability."
A portability provision would permit a surviving spouse to carry over any credit left over by the first spouse to die.
H.R. 4154 would "provide full and permanent estate tax relief for 99.75% of families, farmers, and small businesses in this country, meaning they would not have to pay any estate tax," Pomeroy says in a statement about the bill. "Additionally, by making the 2009 estate tax level permanent, this bill provides the stability families need to make long-term estate planning decisions."
Officials at the Association for Advanced Life Underwriting, Falls Church, Va., say they expect the House to pass the bill, but they say there is a greater likelihood that the Senate will include reunification, portability and indexing for inflation in its version of the bill.
AALU officials cite S. 722, introduced in the Senate by Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, and S. 2784, introduced by Sen. Tom Carper, D-Del.
Both bills would add reunification and portability, as well as index the estate tax rate for inflation, AALU officials note.
An amendment added to the 2010 budget resolution that was passed by the Senate includes the indexing, portability and reunification provisions, an AALU official says.
That amendment, offered by Sen. Blanche Lincoln, D-Ark., and Sen. Jon Kyl, R-Ariz, would have raised the exemption level to $5 million person.
The Senate voted 51-48 to adopt the amendment, but it did not survive conference.
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