2012 Estate Tax Politics

Which side will Estate Tax legislation come down on?

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:

  1. Those who want to extend the Bush-era tax cuts;
  2. Those who want to reinstated the 2009 estate tax exemption of $3.5 million and estate tax rate of 45%; and
  3. 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.

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