New date for federal estate tax reform: June

Last December, when the federal estate tax was about to expire, legislative leaders promised to restore it retroactively, promptly after the first of the year.  To me, that meant February at the latest.  Boy, was I wrong.

Today, according to Dow Jones, the Senate Majority Leader says he expects the estate tax to be discussed in the House Ways and Means Committee in June.  So, best case scenario, they might revise the federal estate tax by the August recess.  The longer they wait, the more indefensible a retroactive change becomes.  Not that the Congresspeople actually care about that.

Estate tax reform will be folded into the decisions on what to do about the Bush tax cuts as they expire at year end.  This will probably not be pretty.

Old Conventional Wisdom:  Congress will never the estate tax expire, not even for a single year.

New Conventional Wisdom:  Get ready for the $1 million federal estate tax exempt amount in 2011.  And the 55% top rates (60% for those in the bubble).