New Estate Tax Proposal Would Hit Wealthier Harder
One of the estate tax proposals is by independent Vermont Sen. Bernie Sanders and three Democratic senators includes what some are calling a “billionaire’s surtax” of 10 percent as part of a 65 percent estate tax on estates of $500 million or more.
The Sanders proposal imposes a 55 percent tax on estates above $50 million and a 50 percent tax on estates with assets of between $10 million and $50 million. In addition, the 2009 exemptions rates for an individual ($3.5 million) and a couple ($7 million) would be reinstated with anything above that taxed at a rate of 45 percent.
The proposal wants all new estate tax rates to be retroactive to Jan. 1, 2010. The Sanders bill would also put a term limit of ten years on grantor retained annuity trusts and make other changes that impact gifting and estate planning.
The Senate continues to be gridlocked on the estate tax issue, brought about in 2001 by the Bush tax cut legislation that reduced estate taxes slowly before eliminating them altogether in 2010. When those tax cuts expire in 2011, the estate tax will return to its previous level, with only a $1 million exemption per estate and a 55 percent estate tax rate unless Congress acts this year to make changes.
A bi-partisan proposal put forth earlier this year by senators Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) would impose taxes on estates of more than $5 million with a top tax rate of 35 percent.
Keep in touch with your Florida estate planning attorney to learn how evolving estate tax legislation will affect you and your family.
