Roxana Tiron & Hans Nichols at Bloomberg News report the President has included his proposal to return the estate tax exemption back to the 2009 level, a $3,500,000 exemption and 45 percent top rate. See http://www.bloomberg.com/news/2012-12-18/obama-concessions-signal-potential-bipartisan-budget-deal.html
One assumes he has proposed simply going back to the 2009 law. This, hence, would also include the $3,500,000 being the exemption also for the gift tax and the generation skipping transfer tax.
On the other hand, the Republicans care much more about these taxes than the Democrats do. Therefore, in a settlement I would guess we would end up with the law as it is in 2012. However, the President may have learned to negotiate by now and could make the $3,500,000 stick if he wanted to. He is in the power position.
Notwithstanding, I still believe they may not reach a deal before Dec. 31 and so the House Republicans would give up at the last day and pass the Middle Class Tax Cut Act already passed by the Senate.
If I were Boehner I would offer take the $400,000 level for the tax rates and see whatever entitlement reform and other concessions he can get out of the President. Otherwise, if the “go over the cliff” on January 1st the President will end up getting his $250,000 level. The Republicans will then be under tremendous pressure from 98 percent of their constituents.
However, I would take one last shot at it if I were Boehner: offer to settle on $500,000 as the income level if the President drops the unemployment extension and gives a bit more on entitlements. Actually come to think of it, that is probably what they will settle on today or tomorrow.
Please note, the Bloomberg article is the only article I can find that mentions the estate tax in relation to the fiscal cliff negotiations as of today. The exceptions are two articles that I believe erroneously report the President’s latest offer includes only a $1,000,000 exemption. I find them not credible. The President has talked of the $3,500,000 since 2007.
We shall see.
Estate Tax News Blog