House Democrats are expected to delay consideration of a new Federal estate tax law until after the Thanksgiving recess. The current law will make the estate tax disappear on Jan. 1, only to return in 2011 at higher rates and lower exemptions. Any further delay could make a one-year extension of current law more likely, rather than a permanent resolution of the issue.
The problem to Congress' constituents is estate planning. Few lawmakers are eager to pass a retroactive bill that would tax people after they die and after their estates are already distributed. Democratic leaders want to move a permanent extension of the 2009 structure of the estate tax, which features a $3.5 million dollar per-person exemption and a top rate of 45%.
There is an alternative piece of legislation introduced by Rep. Shelley Berkley, D-Nev. It would gradually bring the top rate down to 35%, and push the exemption up to $5 million and index it for inflation. Berkley's legislation mirrors a plan supported by a bipartisan group of senators during the budget debate earlier this year.
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