Fairfax, VA (Law Firm Newswire) May 6, 2015 – The Congressional Budget Office's (CBO's) findings have arrived in the wake of the latest GOP-backed legislation to eliminate levy on estates.
Republican lawmakers in Congress have wanted to repeal the federal estate tax for many years. And facing the looming April 15 tax filing deadline, the Congressional Budget Office (CBO) made a dire projection for years to come: repeal of what many GOP politicians call the “death tax” would increase the federal deficit by $269 billion. The CBO expects that if the current legislation to repeal the estate tax were to become law, revenue losses to the U.S. Treasury would be realized as early as 2016.
The current bill, sponsored by Rep. Kevin Brady, R-TX, cleared the powerful House Ways and Means Committee in March. The Brady bill would amend the tax code to repeal both the federal estate tax and a generation-skipping transfer tax. The measure would also reduce the top marginal gift tax rate from 40 percent to 35 percent.
Senator John Thune, R-SD, has sponsored a similar measure to the Brady bill, and the upper chamber of Congress is considering that proposal as well. Two-thirds of the Republican caucus in the Senate back Thune’s bill, including Senate Majority Leader Mitch McConnell, R-KY.
Before adjourning for their two-week spring recess, a majority of Republican senators also voted to add an estate-tax-repealing amendment, created by Thune, to their proposed, nonbinding budget for the upcoming fiscal year.
“Republicans are in control of both houses of Congress for the first time since 2006. They have a serious opportunity to repeal the estate tax, which they have long sought,” said Lisa McDevitt, a prominent attorney in Fairfax, Virginia who specializes in estate-planning law. “However, even if the legislation clears both houses of Congress, it will still have to survive a presidential veto to become law.”
Under current law, individuals are exempt from the estate tax if their assets total less than $5.43 million. The exemption threshold for married couples stands at $10.86 million. The estate tax has a top rate of 40 percent.
“It remains to be seen whether the latest attempt to repeal the estate tax will succeed. Even if Congress does repeal it, though, it is important to remember that certain states will still impose their own estate taxes,” McDevitt said. “Depending on the size of their estates, individuals and couples should consult an experienced estate-planning attorney to craft a plan to preserve the maximum possible portion of their assets.”
Lisa Lane McDevitt
2155 Bonaventure Drive
Vienna, VA 22181