Well, shows I am not much of a prognosticator. Senator Kyl, the Senate Republican negotiator, obviously decided to push one of his pet projects and got the Administration to accept much of his prior proposal with outgoing Senator Blanche Lincoln. We will have for two years an estate tax exemption of $5,000,000 with a 35 percent rate on the excess. Of course, it is not permanent. However, the Feds have never lowered the estate tax exemption. Hence, this will set quite a precedent.
One would assume the gift tax exemption will remain at $1,000,000. One would also assume the generation-skipping transfer tax exemption will also be the $5,000,000.
I thought this might happen because Senator Kyl was one of the negotiators. However, I failed to voice it in this blog and so cannot take any credit.
I am amazed the President and his liberal ideologue advisers agreed to this. Most likely Treasury Secretary Geitner got him to agree because I would wager he has more than a $1,000,000 or even $3,500,000 estate.
This is pretty amazing and historic news.
All for now while I get over the shock.