Sens. Blanche Lincoln (Ark.) and Jon Kyl (Ariz.) this week introduced a bill to reinstate the estate tax, which lapsed this year. The senators' proposal would permanently set the estate tax rate at 35 percent, with a $5 million exemption phased in over five years and indexed for inflation. The estate tax that expired last year had taxed estates at a rate of 45 percent, after an exemption of $3.5 million for individuals and $7 million for couples.
There is no estate tax this year because lawmakers last year failed to reach a deal to extend the tax. The U.S. House last year passed an extension of the 2009 rates, but there was no action taken in the Senate. Without action this year, the estate tax reverts back to its pre-2001 rate of 55 percent on estates valued above $1 million.
Reprinted from Livestock Marketing Association