The estate tax currently in place is scheduled to go away in 2010 and then return to 2001 levels in 2011. If you recall 2001 levels only provided a $1,000,000 tax exemption amount and a 55% top rate.
There are a number of proposals in Congress to make the current $3,500,000 exclusion and 45% top rate permanent.
The Office of Management and Budget has to follow the law as it is so by leaving the present law in place the future revenue is counted in the budget. This additional revenue, whether it is real or not helps reduce projected deficits by several hundred billion. Because of this positive impact on federal revenue politicians seem to agree that until health care reform and some of the other high revenue problems are resolved the estate tax will remain in place with possibly a quick amendment at year end.
So don't panic, just one more political game to resolve.
Simple advice for dealing with common estate planning issues. How to minimize your mistakes and understand your options.
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