Lincoln, Kyl Introduce Estate Tax Reform Proposal

Chew on this for a while.

Washington, D.C.U.S. Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) introduced late Tuesday a proposal to permanently reform the federal estate tax.

The proposal would require the Senate Finance Committee to amend H.R. 5297, the Small Business Lending bill, to permanently set the estate tax rate at 35 percent, with a $5 million exemption amount phased in over 10 years and indexed for inflation.  It would also provide a “stepped up basis” for inherited assets.

“It’s time to take decisive action on the estate tax, and provide the permanent solution that Arkansas’s hardworking farmers and small businesses are desperately seeking,” Lincoln said.  “Uncertainty in the estate tax law has caused incredible difficulties for these individuals, which is why I have fought for a quick resolution to the issue that is both permanent and fair. One way to improve upon an already strong legislative initiative that includes tax incentives and a number of other benefits for small businesses is to ensure that we reach a permanent solution on the estate tax to provide small business owners and famers with the certainty they need.”

“If the Small Business Lending bill is intended to help small business create jobs, wouldn’t it make sense to provide small business owners with the certainty that their tax rates aren’t going to skyrocket at the beginning of next year?” said Kyl.  “In just six short months, American taxpayers will face the largest tax hike in history unless Congress acts.  It is estimated that more than a half million American families will pay the estate tax over the next decade, and the lack of congressional action creates a tremendous amount of uncertainty for these families, small-business owners, and farmers.  This uncertainty is one of several factors acting to prevent a strong economic recovery from taking hold.”

The Lincoln-Kyl proposal provides an election for deceased taxpayers to either retain this year’s estate tax rate, which is zero percent with “carry over basis,” or file under the provisions of the new bill.

Their proposal also instructs the Senate Finance Committee to offset the difference in revenue loss between the Obama administration’s proposed 45 percent estate tax rate with a $3.5 million exemption amount and their proposed reform.

If Congress does not act this year, the federal estate tax is scheduled to increase to 55 percent with only a $1 million exemption at the beginning of 2011.

Senators Lincoln and Kyl introduced a similar measure in April 2009 that received broad bipartisan support and was successfully added to the non-binding congressional budget resolution.

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About patlynch
I am a broadcaster in Arkansas, a former freelance writer and political columnist in the Arkansas Democrat-Gazette. Writing Coach. Speaker. Director of the Christian Foundations for Ministry program, and presently enrolled in the Anglican School of Ministry Master of Ministry program.

2 Responses to Lincoln, Kyl Introduce Estate Tax Reform Proposal

  1. Pingback: Kyl-Lincoln Amendment to H.R. 5297 Seeks $5m Estate Tax Exemption and 35% Rate

  2. Pingback: Kyl-Lincoln Amendment to H.R. 5297 (Small Business Lending Fund Act of 2010) Seeks $5m Estate Tax Exemption and 35% Rate

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