House Majority Leader Steny Hoyer has released the floor schedule for next week. Look for debate to start Wednesday on H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses.
The bill would continue as permanent this year’s $3.5 million exemption from the death tax and a permanent top tax rate of 45 percent. Under current law, the estate tax falls to 0 in 2010 and then kicks back up to its previous, damaging level. As the American Farm Bureau explains: “When this happens, stepped-up basis will be limited to $1.3 million per person plus an additional $3 million for property passed to a surviving spouse. After 2010, the exemption will shrink to $1 million a person and the top rate will rise to 55 percent and full step up in basis will be reinstated.”
The National Association of Manufacturers is part of the Family Business Estate Tax Coalition, which urges a permanent rate. In a September 24 letter to the Senate, the coalition argued:
The FBETC is on record this year supporting the Lincoln/Kyl estate tax amendment that passed the Senate floor with a majority of votes during the budget proceedings. This amendment would provide family businesses with certain and permanent relief by reducing the top rate to 35 percent and increasing the exemption to $5 million. Such relief is critical for family businesses at a time when they are struggling to expand their businesses and create much needed jobs.
A House version is H.R. 3905.
So, House bill:
- $3.5 million exemption, 45 percent top tax rate
Preferable bill, which encourages investment and job creation:
- $5 million exemption, 35 percent top tax rate.
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