Saturday, July 29, 2006


As JLM predicted in an earlier post, the House has stapled estate tax reform to an increase in the minimum wage, an item for which some Senators have been clamoring. Here's a link to the Ways and Means press release.

Key elements of this version of estate tax reform:

• Reunify the estate, gift and GST taxes.
• The $5 million exemption is delayed until 2015.
• Inflation indexed after that.
• In 2015 the top tax rate will be 30%; the starting tax rate is linked to the rate on long-term capital gains.
• Portable spousal estate and gift tax exclusions are included, casting a minor shadow over the need for bypass trusts.

But I was right also, in my earlier post, because the extenders bill that was removed from the pension legislation has also been thrown into this pot. So the Senate Democrats will be put to a pretty severe test in holding the filibuster for this one.

1 comment:

JLM said...

ETETRA, PETRA, etc. may yet end up as mere footnotes to the Congressional year, according to today's Washington Post:

"The weekend's flurry of House action may give Republicans some midsummer bragging rights, but it's far from clear that the Senate will go along. The House voted to boost the nation's minimum wage for the first time in nine years, slash the estate tax permanently and extend several business tax breaks. It also voted 279 to 131 to approve the most sweeping overhaul of the nation's pension laws in 30 years.

"Those measures face deep uncertainty in the Senate this week, where maneuvering by Majority Leader Bill Frist (R-Tenn.) has alienated several committee chairmen and triggered Democratic accusations of cynicism. Given senators' ability to thwart legislation more easily than House members, the discontent could prove fatal."