House Passes Bill Modifying Estate Tax
On December 3, the House of Representatives voted 225-200 on a bill to address issues with the estate tax or “death tax”, as it’s been nicknamed. The estate tax will disappear completely in 2010 under rules put in place under the Bush administration. These rules lapse 2011, returning the laws to those in force in 2001. The higher 2001 rates would affect estates worth $1 million and up, which include many small farms and businesses. The bill to repeal the tax must now pass the Senate and be signed by President Obama in order to become law. The bill includes a permanent $3.5 million federal estate tax exemption (up from $1 million) and sets the gift tax and estate tax rates at 45%. This is a reduction from the 55% rate if the current law lapses without new legislation in place.
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