You know those editorial cartoons that always appear the week after Christmas? The ones that depict the old, bearded man with an hourglass leaving the scene, replaced by the cheerful, diaper-clad baby wearing a sash that proclaims the upcoming year?
This year that baby could be replaced by the cowled, scythe-bearing depiction of death — unless Congress acts to prevent the return of the estate tax. If the lame-duck session of Congress fails to act, the estate tax will jump from its current 0 percent back to the top rate of 55 percent with just a $1 million exemption.
While the National Association of Manufacturers and many other business and farm groups have long advocated the permanent end of the estate tax, a reasonable, attainable compromise has been proposed by Sens. Blanche Lincoln (D-AR) and Jon Kyl (R-AZ). Their plan would exempt the first $5 million in an estate’s wealth from taxation and set the top rate at 35 percent.
From Dow-Jones, “Business Groups Back Quick Compromise On Estate Tax“:
Rather than try to use the lame-duck period to set long-term policy, Congress should find a quick compromise to stave off the punitive rates under current law, some business groups argue.
“The last thing we want to do is have any major tax policy determined in the course of a week in a lame-duck cycle following a significant electoral shift,” said Dena Battle, director of tax policy at the National Association of Manufacturers.
Battle said in the long haul, the group will continue to press for ” significant reform,” along the lines of the Lincoln-Kyl proposal.
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