Tuesday, November 16, 2010

Not encouraging

From Tax Notes this morning:

Lawmakers convened a lame-duck session of Congress November 15 with no clear path forward on big-ticket tax items that expire at the end of the year.

Senate Finance Committee Chair Max Baucus, D-Mont., had no conclusive announcements after a meeting with committee Democrats to discuss the year-end tax agenda. 

Further on in the article, it appears that Democrats will demand "offsets" to neutralize any economic benefit of heading off the huge tax increase.  Failing that, they appear poised to allow the full tax increase to go forward, putting the blame on Republican intransigence.  Just as with the estate tax last year, it is a giant game of chicken.

Frankly, if they don't even have legislative language yet, I don't think it's physically possible to get through the process--including getting the budget effect estimates--before the end of the year.

Get ready for the $1 million exemption from federal estate tax. The more interesting question, what happens when the credit for state death tax returns? Do the suspended death taxes return in the states that used to have a "mop up" estate tax?

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