Paul L. Caron

Wednesday, October 13, 2010

The Estate Tax Nail-Biter

The Hill, Estate Tax May Become Another Nail-Biter Debate When Lawmakers Return:

Interest groups on both sides of the estate tax debate are unsure how the issue will play out when lawmakers return to Washington for the post-election lame-duck session. ...

“Unfortunately, I think there is a pretty good chance that they just run it out and let [the repeal] expire,” said Phil Kerpen, vice president of policy at Americans for Prosperity.

Democratic lawmakers were supposed to have wrapped an estate-tax fix in legislation extending the middle-class tax cuts enacted under President Bush.

Sources close to the matter said the fix resuscitated 2009 law, which placed a 45 percent tax on estates exceeding $3.5 million. The levy would be indexed for inflation so fewer people would become ensnared by it.

But Democratic leaders opted to delay action on the Bush-era tax cuts until after the election, thereby punting a resolution on the estate tax into the lame-duck session.

“Inaction is certainly possible, particularly in the lame-duck, which tend to be unproductive,” Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, told The Hill. “We certainly saw last year that inaction is possible.”

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