Congress returned from its Spring Recess on April 20, 2009, and now confronts many significant issues. Among them is federal estate tax reform, presently sent to House and Senate Conference Committee negotiations in anticipation of acceptable legislation.
On April 9, 2009, Web CPA posted an article entitled "Estate Tax Planning for 2009 and Beyond" by Jonathan M. Forster and Jennifer M. Smith, who summarized the pressing need for federal legislation, and updated the political situation just before that Spring Recess:
Senate Finance Committee Chairman Max Baucus, D-Mont., unveiled a proposal last month to make permanent key features of the 2009 estate tax rules. President Obama also has voiced support for freezing 2009 rates and exemptions. * * *Reconsideration of federal estate, gift, and generation-skipping tax legislation now occurs in a vastly different setting than in the past. These taxes are no longer viewed in a segregated philosophical debate, but have become a component of far-larger economic issues involving federal spending and revenue, and financial structure realignments.
The Senate version of the budget plan passed by Congress last Thursday included a bipartisan amendment that raises the estate tax exemption by $1.5 million to $5 million for individuals and $10 million for couples, and cuts the maximum rate from 45 to 35 percent.
However, the House version, which was also approved Thursday, maintains the estate tax at 2009 levels. Under the House version, which preserves Obama’s proposal, individual heirs would be able to exempt $3.5 million from taxes, while couples could exempt $7 million. Amounts above the exemption cutoff would be taxed at 45 percent.
A conference committee will resolve the differences between the House and Senate versions after Congress returns from recess later this month. * * *
The Washington Post, in its article published April 3, 2009, "After Recess, a packed agenda for Congress" by Ben Pershing, described the storm-like environment affecting all federal tax legislation:
First off will be a budget conference report, which the House and Senate will have to negotiate and pass after both chambers approve their own versions this week.So the "heat is on." Opinions are being tossed into the brewing concoction, before it will be served to taxpayers.
Ratifying the budget will let the Appropriations Committee get to work on spending bills, and Pelosi said action on those measures "will be a good part of how we go forward in May and June."
Pelosi hopes to have most or all appropriations bills through the House by June 30.* * *
Academics weigh in. For example, see: Estate tax reform (04/08/09) posted by Professor Gerry Beyer on his Wills, Trusts & Estates Prof Blog, announcing that "Lily Batchelder (Professor of Law, NYU Law) has written a new article entitled Estate Tax Reform: Issues and Options, Tax Notes, Feb. 2, 2009."
Poll-takers and public interest groups weigh in. See: "Public Opinion on Taxes" (updated 04/10/09; PDF, 85 pages) posted by the American Enterprise Institute, which tracked public opinion on taxation since April, 2003; "Poll: Tax Code Complex, Needs Reform; Federal Incomes Taxes 'Too High'" (04/09/09) posted by The Tax Foundation; and "Independent Sector Issues Statement On Reform of the Estate Tax" (03/31/09) posted by the Independent Sector.
And newspapers weigh in. See, for example, Editorial, "The Forgotten Rich" (04/02/09) published in The New York Times; and Editorial, "Our view on rewarding the well-born: What deficits or wealth gap? Congress eyes estate-tax cut" (04/26/09) published in USA Today.
Need we even mention the private interest groups and lobbyists?
The brew is coming to a boil.
Inside your head, on every beat
And the beat's so loud, deep inside
The pressure's high, just to stay alive
'Cause the heat is on
* * *
The shadows are on the darker side
Behind those doors, it's a wilder ride
You can make a break, you can win or lose
That's a chance you take, when the heat's on you
When the heat is on
-- Song, "The Heat is On"
by Glenn Frey