Estate Tax Repeal?--A Congressional Update

After a nine-month hiatus to address last summer's hurricanes and other issues, the Senate is about to consider H.R. 9, which would repeal the estate tax. At present, Jon Kyl (R-AZ), a supporter of repeal, does not believe that full repeal is possible--he favors an increase in the estate exemption (or credit equivalent) to $5 million and equal to the capital gain rate (now 15%) on the rest. Ranking Senate Finance Committee member Max Baucus (D-MT) favors a $3.5 million exemption ($7 million if married) and a graduated set of rates from 15-35%. Robert Greenstein of the Center for Budget and Policy Priorities believes that even the Baucus plan is too generous to the very wealthy.

I am not a fan of the estate tax--nor do I presently favor its repeal. I would come in somewhere between the Baucus and Kyl plans--$4 million (indexed) lifetime exemption (including gifts) and 25% flat rate on the excess.