Leave it to the U.S. Senate. At a time when most of us are worried about keeping a roof over our heads and paying the essential bills, here comes a proposal from two Senators to -- get this -- lower the estate tax for couples with more than $10 million dollars!
In a move that will benefit the top .2% of U.S. taxpayers, Senators Kyl (R-AZ) and Lincoln (D-AK) are proposing to raise the current estate tax exemption from $3.5 million per person ($7 million per couple) to $5 million per person ($10 million per couple) and to lower the maximum tax rate from 45% to 35%. Estimated to cost the U.S. Treasury as much as $250 billion over the next 10 years, this move is also likely to reduce the amount of planned giving by the very wealthy since such giving is often done, in part, to reduce the estate tax burden in wealthy families.
The Obama Administration has proposed instead to freeze the estate tax exemption at its current level when the Bush Administration tax bill expires in 2011.
To learn more about estate taxes, see Nolo's article Estate Tax: Will Your Estate Have to Pay?.