The Hill in an article by Jay Heflin reports that one of the most powerful business organizations that lobbies Congress has given up for now its quest for full repeal of the estate tax. They say that:
Democratic control of Congress has prompted the National Federation of Independent Business (NFIB) to change its tune on estate tax repeal and support a less ambitious approach.
The powerful lobby for small businesses has accepted that it can’t win an outright repeal of the tax in this political climate. So it has backed bipartisan legislation that would create a 35 percent tax on estates worth more than $5 million.
They report that the NFIB believes it can revive a proposal from last year to have an exemption of $5,000,000 and a maximum rate of 35 percent. The bipartisan bill was proposed by Senators Kyl and Lincoln with the support of 10 Democratic senators.
They report that Senator Kyl recently had told The Hill that:
[H]e opposes creating an estate tax that is retroactive to January because it could create an endless stream of litigation as taxpayers cry foul over being taxed subsequent to receiving their inheritance.
He also floated the idea of presenting taxpayers with a choice of either abiding by current estate tax law or complying with whatever level of tax is created later this year.
They also report that:
[S]ome observers recently told The Hill that the midterm elections in November might prompt congressional action on the tax as lawmakers risk political damage for not fixing the tax sooner and keeping taxpayers in the dark on the issue.
I had seen but failed to note the location of an article that stated that the author believes, and I agree, that the longer Congress delays in acting on the estate tax the more it strengthens the hand of Senator Reid and the other Democratic leaders of preventing an increase in the exemption to $5,000,000 with the 35 percent tax. The delay would increase chances of a $3,500,000 exemption and 45 percent rate.
Personally I believe they will not act at all and we will go back to $1,000,000 with a top rate of 55 percent in 2011.
By Kevin Staker