Congress is in recess for the election. Hence, no real news on the estate tax. One small note though, Senate Finance Chair Baucus, who failed in getting the votes in line before the election to fix the estate tax has stated his view on the likely course of the estate tax law. The Great Falls Tribune reports the following re Baucus at a meeting of Montana rural electric cooperative members:
In response to a co-op member’s question, Baucus said that in the past he voted to eliminate the estate tax charged to inheritances, but added there just aren’t enough votes in Congress to get such a bill approved. Baucus said urban lawmakers don’t understand that a Montana farm or ranch might be valued at $3 million or $4 million, but it doesn’t produce a huge income. He said he will seek incremental tax changes, such as getting the $3.5 million personal estate tax exemption “indexed,” or automatically raised each year by the amount inflation increases.
Hence, it appears he assume the exemption will be changed in 2011 from the $1,000,000 to $3,500,000. However, he is personally to blame for the mess we are in now with no estate tax and no step up in basis for all. Therefore, his opinion carries little weight now. He and all of us will be subject to the chaos that will occur in the lame duck session with so much for Congress to do and so little time to do it in. I continue to believe it is more likely than not that the estate tax issue will be “lost in the shuffle”, actually more precisely, forgotten in the chaos. See the article by Jay Heflin at the Hill on how much of a daunting task Congress will have.
By Kevin Staker