Friday, June 3, 2011

Message from Congress: Estate Tax Still on Back Burner

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Although little more than six weeks remain before the estate tax is reimposed at its 2001 level, there is little indication that Congress views the situation with urgency. As reported today in BNA’s Daily Tax Report, leaders in both the Senate and House are focused on the immediate issue of how to pay for and pass the annual package of tax extenders. The lobbying on the extenders bill is all on one side of the issue – business is unanimously in favor of the extenders. As a result, Congress is pressured to address the extenders before passing to the more contentious issues of extending the Bush-era income tax cuts and fixing the estate tax.

On November 16, Chairman Max Baucus (D-Mont.) of the Senate Finance Committee said that lawmakers want to do something about the estate tax, but that the extension of the Bush-era income tax cuts is a priority. On the House side, Democrats hope for a quick resolution of the expired tax extenders, after which they will take up the extension of the income tax cuts and the estate tax. But that may be an unduly optimistic position, given their upcoming minority status in 2011 and the failure to come up with a “pay for” that is acceptable to the resurgent Republicans. Whether we have any estate tax reform during the lame duck session remains an open question.

Harold W. Pskowski, Managing Editor for Estates, Gifts and Trusts

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