Senator's Bill Would Make Estate Tax Permanent at Current Levels

March 27, 2009

Senator's Bill Would Make Estate Tax Permanent at Current Levels

Sen. Max Baucus, the Montana Democrat who chairs the Senate Finance Committee, has introduced legislation that would make the estate tax permanent and at levels that are already in effect this year.

In 2001, Congress passed the current law that gradually phases out the estate tax through 2009 and repeals it for 2010. In 2011, however, the current law is set to expire and estate-tax levels that applied years earlier go back into effect unless Congress takes action.

The bill proposed by Mr. Baucus — the Tax Certainty and Relief Act of 2009, or S 722 — would permanently keep the estate tax at 2009 levels (and do away with the 2010 repeal). Heirs could exempt $3.5-million from taxes ($7-million for couples), with amounts above that taxed at 45 percent. The exemption threshold would be adjusted for inflation in the future.

“This bill would offer certainty on the estate tax,” Senator Baucus said.

Many nonprofit organizations say the estate tax plays an important role in encouraging people to make charitable bequests.

Steve Gunderson, president of the Council on Foundations, a Washington association that represents about 2,000 grant makers, said his organization endorsed Mr. Baucus’s bill.

“The Council on Foundations, and the many grant-making organizations we represent, welcome the greater certainty that Chairman Baucus’s proposal would provide, which will help philanthropies plan more effectively to serve their communities in a time of increasing needs,” Mr. Gunderson said.

— Grant Williams

Comments

You reporter states, “Many nonprofit organizations say the estate tax plays an important role in encouraging people to make charitable bequests.”

I agree. And the inclination to make charitable gifts in a tax-wise manner is equally strong among living donors who make substantial gifts. But try to get the typical planned giving officer to acknowledge that obvious and empirically provable fact, and he/she would prefer to throw his/her grandmother under a bus.

Go figure.

— Jeff Steele Apr 1, 03:59 PM #

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