The House of Representatives stepped up to the plate again this week on the estate-tax issue, approving HR 5638, the "Permanent Estate Tax Relief Act of 2006," by a 269-156 vote. HR 5638 would permanently eliminate the estate tax for 99.7% of Americans, and dramatically reduce the rate for those still required to pay it.
Under current law, the estate tax gradually declines until its full elimination in 2010. However, in 2011, the tax returns in full force, with the personal exemption dropping to $1 million and the maximum estate-tax rate returning to 55%. Measures to enact permanent repeal have passed the House but foundered in the Senate the past two sessions. (See "Senate Again Nixes The Death Of The Death Tax," Nov. 9 BEEF Cow-Calf Weekly.)
HR 5638 would permanently reduce the estate tax on Americans beginning January 2010. Under the bill, the estate-tax exemption would increase to $5 million/person (indexed for inflation), and set the tax rate for estates up to $25 million at 15%. For estates of more than $25 million, the tax rate would be 30%.
The Senate is expected to vote on H.R. 5638 before its Fourth of July recess.
-- Joe Roybal