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AEDNews - Construction Equipment Industry News House Approves Permanent Extension of 2009 Estate Tax Levels, Senate Approach Unclear On Dec. 3, the House passed the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009 (HR 4154), 225-200. The entire Republican caucus (except three absent Republicans) were joined by 26 Democrats in opposition to the legislation that would make permanent the 2009 estate tax rate and exemption levels. The 2009 estate tax includes a top rate of 45 percent and a $3.5 million exemption. It’s still unclear whether the Senate will take up HR 4154, consider its own estate tax legislation, or do nothing on the issue. Health care is expected to dominate the Senate agenda until the end of the year, but if the Senate does not act, the estate tax will expire for one year before returning to pre-2001 levels in 2011, a 55 percent top rate and $1 million per-person exemption. Word on the Hill is that Sens. Blanche Lincoln (D-AK) and Jon Kyl (R-AZ) are hoping to offer legislation that would permanently cap the top estate tax rate at 35 percent with a $5 million per-person exemption (indexed for inflation). In April, a similar proposal was approved by the Senate 51-48 as an amendment to the budget resolution. The Senate amendment was taken out during conference between the House and Senate, and the final budget resolution allowed for the estate tax rate and exemption to be frozen at 2009 levels (similar to HR 4154). As the year winds down, Senate Republicans appear to be divided on how to approach the estate tax. Some, like Senator Kyl, believe that now is the time to find a reasonable compromise (35 percent rate, $5 million per person exemption) or else it is very likely that in 2011 the estate tax will return to pre-2001 levels. However, many Republicans would prefer to see the estate tax expire in 2010 and negotiate a more favorable compromise in 2010. The thinking is that in an election year, Democrats will be more likely to agree to higher exemptions and lower rates. Such an approach is a gamble because it assumes Congress will actually turn to the estate tax in 2010. Next year’s congressional agenda is already starting to fill up and members of Congress do not like to take tough votes on controversial issues in election years making it uncertain whether the estate tax will be considered in 2010. There is also a core group of more liberal Democrats that are content with allowing the estate tax to go away for one year in anticipation of the tax returning to pre-2001 levels in 2011. Nonetheless, if most Republican senators are content with allowing the estate tax to expire for a year and believe a better deal can be obtained next year, they can make it nearly impossible for the Senate to consider estate tax legislation. Senate rules require unanimous consent to suspend the consideration of legislation and turn to a different matter. If Senate Majority Leader Harry Reid (D-NV) attempts to turn from health care to consideration of estate tax legislation, Republicans can object to consent and require a series of procedural votes and debate that could waste a significant amount of the Senate’s time, possibly even running out the clock until the end of the year. AED will continue to monitor the estate tax debate as it plays out before the end of the year. To send an e-mail to your senators/representative urging permanent estate tax reform, visit http://www.aedaction.org . Article Date: 12-07-2009 Source: Associated Equipment Distributors Copyright(C) 2009 Associated Equipment Distributors. All Rights Reserved. | ||||||
AEDNews is the weekly electronic newsletter published by Associated Equipment Distributors, providing the construction equipment distribution industry with timely news and information related to the equipment business.