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tax topics

2010 Budget Tax Proposal

Make 2009 estate tax permanent

In 2001, Congress voted to phase out the estate tax gradually and repeal it entirely in 2010. However, unless the law is changed, starting in 2011 estates valued at $1 million or more would again be subject to tax at progressive rates as high as 60 percent. This extraordinary situation places great pressure on Congress and the President to reconsider the tax this year.

The Obama budget assumes permanent extension of the estate tax under 2009 parameters as part of its baseline. Estates with a net value over $3.5 million or more would face a 45 percent tax rate. For married couples, a modest amount of tax planning would raise the exemption to $7 million. Making permanent the 2009 estate tax provisions would reduce federal revenues by $171 billion over the coming decade.  However, because the administration proposes to build the extension into the budget baseline, the budget itself shows no revenue cost from this proposed change.

Distribution tables
Make 2009 estate tax permanent                     
2012 versus current law by cash income
2012 versus current law by cash income percentiles
2012 versus current law plus repeal of estate tax by cash income
2012 versus current law plus repeal of estate tax by cash income percentiles

Additional Resources
Tax Topics: Estate and Gift Taxes
Tax Policy Briefing Book: Wealth Transfer Taxes