Introduced in the House of Representatives by Representative Mitchell (D-Ariz..), this would reform the estate and gift taxes permanently. The primary provisions of this bill would
* Make the estate and GST taxes permanent;
* Make the applicable exclusion amount permanent at $5 million, phased in as follows:
… For calendar year 2010, $3,750,000
… For calendar year 2011, $4,000,000
… For calendar year 2012, $4,250,000
… For calendar year 2013, $4,500,000
… For calendar year 2014, $4,750,000
… For calendar year 2015 and thereafter, $5,000,000;
* Index the applicable exclusion amount for inflation, after 2015;
* Retie the gift tax exemption to the estate tax applicable exclusion amount;
* Set the top estate and gift tax rate at the capital gains rate for estates of up to $25 million, Repeal the estate tax deduction for state death taxes;and double that rate for estates over $25 million;
* Index the $25 million figure for inflation after 2014;
* Repeal the estate tax deduction for state death taxes;
* Retain the present basis step-up rules; and
* Make the unused applicable exclusion amount of the first spouse to die available to the surviving spouse.
Obviously, this is one of many competing approaches, designed to move the eventual debate. This bill has considerable merit, in the view of the Will Doctor. However, it seems premature to pick horses in this race just yet. We will keep you informed.