The estate tax and take home pay are the most interesting parts for the nonprofit sector of the deal President Obama and Republican leaders have worked out. But, not so fast. The president’s fellow Democrats are screaming foul and a bill is far from passed, or even drafted.
The tentative tax deal with Republican leaders includes a provision that would set the estate tax exemption level and rate at $5 million and 35 percent for two years and any tax to $10 million for couples.
Independent Sector had called on Congress to preserve the estate tax incentive for philanthropic giving by ensuring that any modifications to the tax do not raise the exemption level or lower the tax rates beyond the 2009 law. The Washington, D.C.-based coalition of nonprofits recently signed on to an Americans for a Fair Estate Tax coalition letter that calls for the estate tax to be permanently reinstated during the lame duck session at no less than the 2009 levels (45 percent, $3.5 million individual exemption).
IS previously signed onto a coalition letter of nearly 75 estate tax advocates in support of the Responsible Estate Tax Act (S. 3533) introduced by Sen. Bernie Sanders (I-Vt.) that would restore the estate tax at the 2009 exemption levels with progressive tax rates on larger estates, including a 10 percent surtax on the wealthiest estates. Sanders told reporters, “I intend to do everything that I can to defeat this proposal and bring back something which in fact protects the middle class and unemployed workers and not the wealthiest people in this country,” Sanders said. “I’m willing to anything and everything that I can to win this, including a filibuster.”
The 45 percent rate and $5-million estate tax exemption had been previously proposed in legislation by Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) Sen. Max Baucus (D-Mont.) recently proposed legislation with a permanent estate tax rate of 45 percent and an exemption of $3.5 million ($7 million for couples).
If Congress does not reach an agreement, the estate tax is scheduled to come back in 2011 at 2001 levels: a top tax rate of 55 percent and a $1-million exemption.
Among other things, the tax deal would extend all 2001 and 2003 individual income tax cuts, reduce Social Security tax rate on employees to 4.2 percent for next year and drop self-employment tax rate by 2 points.
The tentative tax deal with Republican leaders includes a provision that would set the estate tax exemption level and rate at $5 million and 35 percent for two years and any tax to $10 million for couples.
Independent Sector had called on Congress to preserve the estate tax incentive for philanthropic giving by ensuring that any modifications to the tax do not raise the exemption level or lower the tax rates beyond the 2009 law. The Washington, D.C.-based coalition of nonprofits recently signed on to an Americans for a Fair Estate Tax coalition letter that calls for the estate tax to be permanently reinstated during the lame duck session at no less than the 2009 levels (45 percent, $3.5 million individual exemption).
IS previously signed onto a coalition letter of nearly 75 estate tax advocates in support of the Responsible Estate Tax Act (S. 3533) introduced by Sen. Bernie Sanders (I-Vt.) that would restore the estate tax at the 2009 exemption levels with progressive tax rates on larger estates, including a 10 percent surtax on the wealthiest estates. Sanders told reporters, “I intend to do everything that I can to defeat this proposal and bring back something which in fact protects the middle class and unemployed workers and not the wealthiest people in this country,” Sanders said. “I’m willing to anything and everything that I can to win this, including a filibuster.”
The 45 percent rate and $5-million estate tax exemption had been previously proposed in legislation by Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) Sen. Max Baucus (D-Mont.) recently proposed legislation with a permanent estate tax rate of 45 percent and an exemption of $3.5 million ($7 million for couples).
If Congress does not reach an agreement, the estate tax is scheduled to come back in 2011 at 2001 levels: a top tax rate of 55 percent and a $1-million exemption.
Among other things, the tax deal would extend all 2001 and 2003 individual income tax cuts, reduce Social Security tax rate on employees to 4.2 percent for next year and drop self-employment tax rate by 2 points.
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