On March 21, 2007 the Senate adopted the Baucus amendment to make permanent the 2009 estate-tax law. Under Baucus’ plan, the Federal Estate Tax exemption level would rise to $3.5 million ($7 million per couple). Everything above that level would be taxed at a 45% tax rate. Under the 2009 law only three in 1,000 estates would owe any estate tax.
In August, 2006, a measure (H.R. 579) that would have repealed the State Tax was defeated in the Senate. The measure would have exempted estates valued at $5 million ($10 million for married couples) from taxation; estates valued from $5 to $25 million would be taxed at 15 percent; and estates valued at greater than $25 million would be taxed at a 30 percent rate. This controversial bill would have removed much of the incentive for charitable giving through bequests and would have significantly reduced revenue for the federal treasury.
The Independent Sector provides a summary of Estate Tax Reform.
Read a 2006 Op Ed piece from the Pittsburgh Post Gazette: America Needs the Estate Tax
The House of Representatives passed H.R. 8, The Estate Tax Act, on June 13, 2003 by a vote of 264 to 163. The bill would have made the estate tax repeal permanent beginning in 2010. In 2002, permanent repeal fell six short of the 60 votes required for passage. In May 2001, Congress passed H.R. 183, the $1.35 trillion tax-cut bill. The final agreement included estate tax repeal, but full repeal will only be in effect for one year – January 1, 2010 to December 31, 2010 – at which point the repeal, as well as all other components of the bill, is scheduled to end, and current tax law will resume. Between now and then, the top marginal rate will drop from its current amount of 55 percent to 45 percent by 2007, and the wealth exemption will jump from $675,000 to $1 million next year (five years earlier than current law provides for) and will go to $3.5 million by 2009.