Thursday, December 17, 2009

Estate tax to lapse as legislated

There was not enough time all year long to attend to the estate tax, and there isn't enough time before Christmas to get it done. The last, futile gestures are reported by Tax Notes Today ($).

Max Baucus asked for unanimous consent for an extension of the current law, to which minority leader Mitch McConnell objected. McConnell in turn asked for unanimous consent to a measure boosting the exemption to $5 million, and Baucus objected to that. It wouldn't have mattered, because the House won't take up any new legislation before the holidays.

Prominent Democrats are saying they'll restore the estate tax next year, and make it retroactive to January 1. You can have retroactive rate increases, I'm not so sure about retroactive taxes.

Also left unfinished by the Senate, the $31 billion extenders bill. Tax breaks can be granted retroactively, of course, so that one is less problematic.

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