It’s the same ole’, same ole’, just a different year.
Thanks to politicians opting to “punt” any formal estate tax decisions down the road a couple of years ago, they are now once again saddled with how to handle the expiration of the Bush-era tax cuts coming in 2013.
Prior to their recent adjournment, the Democrat-controlled Senate voted to extend the Bush-era tax cuts for everyone except single filers earning above $200,000 and joint filers earning more than $250,000. Meanwhile, the Republican-controlled House of Representatives voted to extend all of the Bush-era tax cuts, including the current $5.12 million estate tax exemption and 35% estate tax rate.
So, what does this all mean? Well, there seem to be three different groups emerging around this debate:
- Those who want to extend the Bush-era tax cuts;
- Those who want to reinstated the 2009 estate tax exemption of $3.5 million and estate tax rate of 45%; and
- Those who want the estate tax exemption and rate to revert back to the pre-Bush-era tax cuts, which would result in a $1 million estate tax exemption and estate tax rate of 55%.
Click here if you would like to learn more about the debate surrounding these different groups.