TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, January 12, 2009

Obama Plans to Keep Estate Tax

Front page story in today's Wall Street Journal: Obama Plans to Keep Estate Tax, by Jonathan Weisman:

President-elect Barack Obama and congressional leaders plan to move soon to block the estate tax from disappearing in 2010, suggesting the levy might outlive the "Death Tax Repeal" movement that has tried mightily to kill it. ...

Democrats are determined to act quickly to prevent the estate tax's scheduled repeal. Elimination of the levy on big inheritances was approved by Congress under President George W. Bush in 2001, with rollbacks phased in slowly and its full elimination slated to take effect next year.

The Senate Finance Committee will move within weeks on legislation to reverse that law, and Mr. Obama is expected to detail his estate-tax preservation proposal in his budget next month, congressional tax writers said.

Under the Obama plan detailed during the campaign, the estate tax would be locked in permanently at the rate and exemption levels that took effect this year. That would exempt estates of $3.5 million -- $7 million for couples -- from any taxation. The value of estates above that would be taxed at 45%. If the tax were returned to Clinton-era levels, it would exclude $1 million from taxation with the rest taxed at 55%.

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Comments

Obama's proposal may upset estate planning calling for life support by all means during 2009 for the critically ill wealthy until after the upcoming New Year.

With recent declines in asset values, Obama's proposal seems fair.

Posted by: Shag from Brookline | Jan 12, 2009 7:40:38 PM

The Lawyers and Life Insurance Company Welfare Act of 2009?

Bad, bad idea.

Posted by: Rusty | Jan 12, 2009 7:40:38 PM