Congressional leaders do not have an agreement on preventing the estate tax from expiring as scheduled on Jan. 1. With final legislative vehicles moving this week, Representative Earl Pomeroy, D-N.D., admits, there is a substantial prospect that the tax will lapse. Pomeroy is the sponsor of House legislation on the issue.
House Ways and Means Committee Chairman Charles Rangel, D-N.Y., supports an estate tax extension for a few months. He says anything to make certain it doesn't expire. If Congress fails to act by year's end, the estate tax disappears next year but snaps back in 2011 at $1 million per person exemption and a 55% tax rate.
In the Senate there's a chance the Defense Appropriations bill could include an extension of estate tax rates and exemptions and Senator Chuck Grassley, R-Iowa, says he along with a few other Senators would push for a change.
"I don't know exactly what's going to happen on that in the U.S. Senate," Grassley said. "But I know if there's a chance for estate tax debate to come up, that there's going to be a bipartisan group if people led by me and Kyl and Blanche Lincoln. We want to get it done and that would be $5 million and a 35% tax rate as opposed to current law of $3.5 million and a 45% rate."
Grassley is hopeful that's something the Senate can discuss rather than having an extension of current law shoved down their throats in the name of supporting the troops.
"That makes it a very difficult choice for us, particularly if they adjourn and go home and leave us with passing this or not passing it," Grassley said. "It makes it kind of difficult, but we hope to have a fight for a better deal on estate taxes. Particularly considering the fact that farmland has gone up so much since we originally set the $3.5 million figure 10 years ago."
Grassley believes the fact that the estate tax will disappear next year if Congress fails to act will provide some leverage for the effort.