The estate and gift tax provisions enacted in 2010 are set to expire in 2013, Congressional Budget Office (CBO) analysts note in a budget outlook review.
President Obama set the individual estate tax exemption and the estate tax rate 35% when he signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
If Obama had not signed that act into law, the Economic Growth and Tax Relief Reconciliation Act of 2001 would have returned the estate tax system to 2001 levels, with an individual exemption of just $1 million and a top rate of 55%.
But the 2010 tax act will last just 2 years, and the estate tax system is on track to return to where it was in 2001 in 2013, CBO analysts write in the budget outlook.
The estate and gift tax provisions in the 2010 tax act will cost the government $68 billion in revenue from 2011 to 2020, but the estate tax and gift tax could still generate about $492 billion in revenue from 2012 to 2020, the analysts estimate.
Annual estate and gift tax revenue could increase to $73 billion in 2021, from $19 billion in 2010.
Elsewhere in the report, the analysts estimate that:
- The tax exclusion of employer contributions for health care will cost the government $659 billion in revenue from 2010 to 2014.
- The tax exclusion for pension contributions and earnings will cost the government $597 billion from 2010 to 2014.
- The Social Security Disability Insurance trust fund will run dry in 2017.
- The Medicare hospital insurance trust fund will be empty in 2021.
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