Federal Budget & Tax

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Friday, March 28, 2008

CRS Report: Estate and Gift Tax Revenues: Past and Projected in 2008

There are a few noteworthy findings in this CRS report on the estate tax:

Estate tax repeal would account for over 25 percent permanent extension of the 2001-2003 Bush tax cuts
In 2006, 0.93 percent of deaths resulted in taxable returns. In 2002, that number was 1.86 percent.
Estate and gift tax revenues accounted for 1.0 percent of federal revenue in 2006 - a decrease from 1.4 percent in 2002.

Posted by Craig Jennings, 10:39:15 AM

Friday, March 14, 2008

Vota-Round-Up, I: State of the Estate Tax

Six votes on the estate tax were held during yesterday's budget resolution vote-a-rama in the Senate, as follows:

Baucus amendment 4160: makes 2009 estate tax law permanent -- exemption $7 million per couple; rate 45%. Paid for via a reserve fund from projected surpluses Approved, 99-1.
Graham amendment 4170: exemption per couple $15 million; 35% rate. Rejected, 47-52.
Kyl amendment 4191: exemption $10 million per couple; rate starts at 15%, top rate 35%. No offsets. Rejected, 50-50.
Kyl amendment 4372: protects small businesses, family ranches and farms by providing a $5 million exemption, a low rate for smaller estates and a maximum rate no higher than 35%. Rejected 48-50.
Salazar amendment 4196: exemption 10 million per couple; rate 35% -- paid for via a reserve fund from projected surpluses. Rejected 38-62.
Landrieu amendment 4378: $10 million per-couple exemption and a 35 percent rate, with a small surcharge for large estates and several special tax breaks for small businesses and family farms. Rejected 23-77.

Posted by Dana Chasin, 02:35:53 PM

Democrats Pass Budget in House & Senate

The House and Senate successfully passed their versions of the FY 2009 budget resolution yesterday. The House passed their spending outline on a mostly party-line vote 212 - 207 and the Senate passed their version early this morning 51 - 44 (roll call not available yet). Sixteen Democrats in the House opposed the budget along with all Republicans and in the Senate, Sens. Olympia Snowe (R-ME) and Susan Collins (R-ME) supported the budget, while Sen. Evan Bayh (D-IN) opposed it.

The House and Senate versions are similar in a number of areas, but the House blueprint is more fiscally responsible - strictly adhering to PAYGO rules by requiring offsets for mandatory spending increases and any additional tax cuts - particularly offsetting changes to the alternative minimum tax. Way to go House of Representatives!

There were tons of amendments in the Senate all through the day and night on key fiscal issues. We'll be dissecting the amendments and votes throughout the day today here on the BudgetBlog. Stay tuned!

Posted by Adam Hughes, 09:25:16 AM

Thursday, March 13, 2008

Estate Tax Madness

The Senate has officially gone over the the bad place. Three out of the first seven amendments to the FY 2009 budget resolution propose to make costly changes to the estate tax. While only one of them was adopted, unfortunately the breakdown of the votes showed less support for a rational, fiscally responsible reform to the estate tax.

Here's a quick summary of the amendments:

Sen. Max Baucus' (D-MT) amendment to use projected surpluses in 2012 and 2013 to extend popular middle-class tax cuts and make changes to the estate tax by extending the 2009 levels ($7 million exemption for a couple, 45 percent marginal rate) passed overwhelmingly 99 - 1.
Sen. Ken Salazar (D-CO) offered an amendment that would have likely increased the exemptions for the estate tax to $10 million per couple and drop the marginal tax rate to 35 percent. This amendment failed 38-62, but garnered 15 more votes from Democrats who, quite frankly, should know better, than it did last year when a simliar amendment was offered by Sen. Ben Nelson (D-NE), which received 25 votes.
Sen. Jon Kyl (R-AZ) offered an amendment that would make similar changes in the exemption levels and marginal tax rates as Salazar's amendment, but would not offset the tremendous cost of such an amendment - likely around $750 billion over the next ten years according to the Joint Committee on Taxation. Kyl's amendment failed by a 50-50 vote.

Posted by Adam Hughes, 02:29:29 PM

Tuesday, March 11, 2008

JCT Report on Alternative Estate Tax Systems

In advance of tomorrow's Senate Finance Committee hearing, Alternatives to the Current Federal Estate Tax System, the Joint Committee on Taxation has issued a report at once broad and brief, "Description and Analysis of Alternative Wealth Transfer Tax Systems," (JCX-22-08), March 10, 2008.

The report, which explores tax policy relating to various approaches to intergenerational wealth transfer, is detailed without being overly technical, is worthwhile reading for anyone interested in estate, inheritance, and gift tax systems. See: Report.

Posted by Dana Chasin, 11:41:30 AM

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