Granted, this isn’t exactly a probate-litigation story, but the estate tax looms so large over every aspect of trust and estates law in the U.S., I can’t just ignore it.
So here’s the latest. In what is becoming an annual ritual (usually timed for maximum political advantage), the House voted yet again on April 13, 2005 (272-162) to repeal the federal estate tax in 2010 and beyond. The legislation would prevent the estate tax from re-emerging after its scheduled elimination, for one year, in 2010. Previous bills passed by the House have languished in the Senate. Talks between Republicans and Democrats have just begun in the Senate, where some lawmakers have worried about increasing federal deficits. In fact, with a $1.3 trillion deficit already forcast for the next decade, walking away from an additional $290 billion in lost estate-tax revenues (source: Joint Committee on Taxation Report) has some fiscally conservative Republicans re-evaluating their positions. Estate tax repeal’s top proponent, Sen. Jon Kyl, R-Ariz., refused to predict an outcome. The full Associated Press story is available here.
For those tax-policy wonks out there (and you know who you are . . . ), you may want to take a look at a couple of policy briefs arguing the pros and cons of repeal. The Tax Policy Center recently published a report arguing in favor of reform rather than repeal of the estate tax (available here). A good policy-based summary of the arguments for repeal are summarized in a June 2003 Congressional study (available here). Enjoy!