Two Years of Tax Relief - Then What?
I was reminiscing tonight about the 6 months I worked on Capitol Hill as a Senate intern during college. I used to go to the Senate souvenir shop, buy a box of Good & Plenty, and go watch the debates in the Senate Chamber while I chomped the delicious pink and white cylinder shaped candy. I was thinking about that tonight because I’ve been sitting in my office all evening watching C-SPAN while working on my computer. Just after midnight, EST, I watched the House pass The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 by a vote of 277 – 148. The House rejected the Pomeroy Amendment, which would have lowered the estate tax exemption to $3.5 million and raised the estate tax rate to 45%. After the Amendment was soundly defeated, the House passed the Senate Bill re-instating the estate tax with a $5 million per person exemption and an estate tax rate of 35% beginning January 1, 2011. President Obama will certainly sign it. And then the law will expire – again – in two years.
I jotted down some interesting statistics cited during the debate by Representative Chris Van Hollen (D-MD) about the new estate tax provisions:
Only impacts 6600 estates a year
Affects only the top three-tenths of one percent of the population
Lowest estate tax in 77 years
As I sat watching the debate, it occurred to me that I was watching Democrats and Republicans alike giving all the reasons why they would vote against the Bill – right before they all voted for it.
What a ride.
And deja vu all over again. I am already picturing myself in my client conferences telling the same hackneyed joke I’ve told for years. “If you’re real lucky and die in the next two years (we used to say 2010), guess what? No estate tax! Oh. You plan on living longer than that? Well, we don’t know what the law is going to be but let’s hope for the best and plan for the worst.” I was really hoping (as I’m sure my clients were) that I wouldn’t ever have to tell that joke again.
Certainty. What a pipe dream.
We will have lots of details about these new – but temporary – rules to share with you over the next couple of weeks. Won’t that be a nice holiday treat!
Thanks for reading. Stay tuned.
