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House Estate Tax and Extenders Bill
The House passed the Estate Tax and Extension of Tax Relief Act of 2006 (HR 5970, "ETETRA") last Friday. The Senate is considering it this week. The Tax Policy Center has prepared estimates of the effects of the bill on the distribution of tax burdens. The bill would raise the estate tax exemption from $2 million to $5 million effective in 2007 and would tax estates up to $25 million at the capital gains tax rate (currently 15 percent). Estates in excess of $25 million would be taxed at a 30 percent rate. The provisions phase in slowly to reduce the revenue loss in the budget window (although not over the long-term). The bill would also extend certain expiring tax provisions, the largest of which is the tax credit for research and experimentation expenditures, which expired at the end of 2005.
TPC analysis shows the bill is expected to cost the Treasury $230 billion during the 2007-2016 budget window, with almost 80% of the bill's benefits accruing to taxpayers with incomes greater than $100,000.
Link to Estate Tax and Extension of Tax Relief Act of 2006 estimates
Link to recent estate tax estimates
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