| Ways and Means Chairman Thomas introduced |
The latest setback for repeal advocates came June 8 in the Senate, when they came up three votes short of the 60 needed to block a filibuster on a permanent repeal bill. That outcome indicated that permanent repeal again was unlikely to clear the Senate this year.
The new vehicle is a bill introduced June 19 by House Ways and Means Committee Chairman Bill Thomas (R-Calif.). As of Jan. 1, 2010, the Thomas proposal would raise the exemption from inheritance levies to $5 million. The effective exemption for 2006 is $2 million. Under current law, that exemption is slated to rise to $3.5 million in 2009.
For estates between $5 million and $25 million, the Thomas bill would cut the tax rate, which tops out at 46% this year, to the capital gains tax rate, which currently is 15%.
For estates of $25 million or more, the bill would set the tax rate at double the capital gains rate.
The Associated General Contractors is preparing a letter to Congress supporting Thomas' bill, says Heidi Blumenthal, AGC's director of tax and fiscal affairs. AGC still would like to see permanent estate tax repeal, but after the Senate vote, she says the new bill "is probably our best chance for something that is real and meaningful reform."
Under a 2001 statute, the estate tax gradually decreases until 2010, when it is set to be repealed. But unless Congress acts by that point, the levy would return in 2011, hitting estates valued at more than $1 million. The maximum rate would jump to 55%.
To read comments to Construction.com "death tax" poll here.
(Photo courtesy of House Ways and Means Committee)n an apparent recognition that they won't be able to achieve permanent repeal of the federal estate tax this year, Republican House leaders are turning to a compromise that provides relief from the inheritance levy, but doesn't do away with it for all taxpayers. Republicans, with the support of construction groups and other business organizations, have tried for several years to repeal the estate tax permanently. Bills to do that have passed the House, most recently in April 2005, but bogged down in the Senate.