In case you haven't heard, Senators Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) are at it again. Back in April 2009 they teamed up on S.Amdt. 873, which called for a $5 million federal estate tax exemption and 35% estate tax rate and passed in the Senate by a 51-48 vote. But as we now know, nothing came of this or any of the other measures that were introduced in 2009 and so on January 1 the federal estate tax was officially repealed. Well late on Tuesday Lincoln and Kyl teamed up once again to introduce a proposal that calls for an amendment to H.R. 5297, commonly referred to as the Small Business Lending Bill, that would provide for the following:
- Lock in the federal estate tax rate at 35%.
- Offer a $5 million federal estate tax exemption that would be indexed for inflation and phased in over 10 years.
- Bring back a step up in basis for inherited property.
- Give the estates of people who die in 2010 the option of choosing between being governed by the 2010 modified carryover basis rules or by the provisions of the new law.
Sound familiar? And the timing of this proposal is just perfect - on the heels of the death of yet another billionaire, George Steinbrenner. It sure seems like members of Congress are really kicking themselves over allowing the federal estate tax to disappear in 2010. But once again it's just more political posturing and rhetoric - this measure will surely go nowhere just like all of the others that came before it.
- July 14 joint press release - Lincoln, Kyl Introduce Estate Tax Reform Proposal
- Notes and resources on the Lincoln-Kyl proposal to add permanent estate tax fix to H.R. 5297
- Lincoln, Kyl introduce estate tax fix
- Estate Tax Repeal Equals Stepped Up Basis Repeal
- What is the Modified Carryover Basis Regime?