Printer Friendly

Kyl-Lincoln ready to offer estate tax amendment.

June 15, 2010

The inability of any estate tax proposal to garner 60 votes in the Senate is becoming increasingly apparent. However, there appears to be some hope as a small-business bill coming soon to the Senate floor could provide the catalyst for dealing with the estate tax.

Senate Finance Committee members Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.) have been among a few senators pushing for a compromise between Senate Democrats who want to reinstate the estate tax at 2009 levels and Senate Republicans who want full repeal of the tax.

Kyl is expected to offer an amendment to the yet released small-business bill that would reinstate the estate tax at a 35 percent top rate with a $5 million exemption level. The estate tax expired at the end of 2009 but is scheduled to return in 2011 with a 55 percent top rate and a $1 million exemption.

In December, the House passed H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, which would make permanent the 2009 estate tax levels with a top rate of 45 percent and a $3.5 million exemption, without indexation.

While the Kyl-Lincoln proposal is significantly more generous to estate owners with a larger price tag, both senators have said they plan to pay for the difference between their amendment and the House bill by finding offsets in the part of the tax code governing estates and gifts. Under the pay-as-you-go law, changes to the estate tax beyond 2011 would require hundreds of billions of dollars in offsets.

As of last Friday, Kyl believed he was "pretty close" to gathering the 60 votes required to pass a bill in the Senate based on his plan. However, this has happened before when lawmakers were close to crafting a compromise plan that could pass, but then the agreement fell apart on both substance and process.

Senate leaders plan to bring the package of small-business tax breaks and lending assistance to the floor after the chamber finishes work on the tax and benefits package (H.R. 4213). Leadership has avoided a markup in the Senate Finance Committee in part because the committee -- unlike the majority of Senate Democrats -- would likely back a Lincoln-Kyl estate tax amendment.

At this point, the path forward remains unclear. Lawmakers could resolve their differences on the estate tax without the need for an amendment or they could agree to set that issue aside and let the small business package proceed directly on the Senate floor. Another option would be to resolve nothing and let both estate tax relief and the small business package die before reaching the Senate floor for consideration.

COPYRIGHT 2010 National Small Business Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2010 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:The Weekly Advocate e-Newsletter
Date:Jun 16, 2010
Words:449
Previous Article:Credit card purchases exempt from 1099 reporting.
Next Article:Amendment to remove S-Corp tax from extenders.
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters