New Estate Tax Bill?

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The following article is from Dow Jones.

Senate Democrats are considering piecing together a continuation of the Bush tax cuts and a renewal of the estate tax in a single piece of legislation lawmakers hope to consider before they leave town in advance of the November elections, a senior Senate Democratic leadership aide said Tuesday.

The aide didn’t say whether the bill would extend all of the Bush tax cuts or just those affecting people earning less than $200,000 a year.

No final decisions have been made as to what would be included in the legislation, details of which are expected to be unveiled later this week by Senate Finance Committee Chairman Max Baucus (D., Mont.).

House and Senate Democratic leadership met Tuesday afternoon in an attempt to chart a way forward for dealing with the tax cut renewal question in the short time lawmakers are expected to remain in Washington D.C.

The Senate is only expected to remain in session for another two weeks at most.

Speaking to reporters after leaving the meeting, Senate Majority Leader Harry Reid (D., Nev.) said no agreement had been reached, and there would be further meetings aimed at reaching one.

He was stepping into a meeting with his counterpart, Senate Minority Leader Mitch McConnell (R., Ky.), in an attempt to reach a deal on how to bring a tax bill to the floor of the Senate next week.

But Republicans are seen as unlikely to agree to allow Democrats to bring a bill to the floor.

Absent a deal with the Republicans, Democrats would be left having to convene a procedural vote to allow debate on a tax bill to begin on the Senate floor.

Assuming they retained the support of all 59 of their members including the two Independent lawmakers who generally vote with the party, they would need at least one Republican lawmaker to vote with them.


Sen. Ben Cardin (D., Md.) said most Democrats wanted a vote on extending the middle-class tax cuts before adjourning for the campaign, but that there were divisions within the caucus about the political risks and benefits of holding votes that were destined to fail.

“We don’t think it likely that Republicans would like to make a deal before the elections,” he said after a closed-door party caucus meeting earlier Tuesday. “As a practical matter, we cannot get it done.”

Sen. Dianne Feinstein (D., Calif.) said she didn’t expect there would be a vote before the elections.

“In my opinion, I don’t know who takes a tax vote, in their right mind, just before an election,” she said.

Another possibility would be to attach some extension of the tax cuts to must-pass legislation to temporarily continue funding for the federal government, but aides and lawmakers played down that suggestion Tuesday afternoon.

House Democratic leaders have repeatedly said they want to let the Senate act first on the tax issue, rather than ask lawmakers in that chamber to take a politically difficult vote weeks before the elections.

Unless action is taken, the Bush tax cuts enacted in 2001 and 2003 would expire at the end of the year resulting in an increase in income tax rates as well as those on dividends and capital gains.

The estate tax expired at the end of 2009. As part of the 2001 Bush tax law, the threshold for the estate tax was increased from $1 million to $3.5 million, and the rate charged on assets above that lowered to 45 percent from 55 percent. If no action is taken, the measure would be reinstated in 2011 at the higher rate and lower threshold.

(KM)

Source:  Dow Jones

 

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