House, Senate Offer Differing Estate-Tax Provisions
House, Senate Offer Differing Estate-Tax Provisions
The House and Senate have passed budget outlines that differ significantly in how they treat the estate tax, the Chronicle of Philanthropy reports. Passed by Congress in 2001, the current law is set to expire in 2011, at which point estate-tax levels that applied years earlier will go back into effect unless Congress takes action.
The House budget follows the Obama administration's proposal with respect to the tax: keeping it at 2009 levels and eliminating complete repeal of the tax in 2010. If that proposal is enacted, the first $3.5 million inherited by an individual ($7 million for couples) would be exempt from estate taxes, with amounts above that taxed at a 45 percent rate.
The Senate's budget would raise the exemption for individuals to $5 million ($10 million for couples) while lowering the tax rate to 35 percent — a proposal that alarms many in the nonprofit sector. Opponents of the Senate proposal cite studies which show that a higher estate tax prompts more giving to charity as a way to shield some assets from taxation.
Independent Sector recently issued a statement about estate-tax reform in which it argued that raising the exempt amount and lowering the rate from 2009 levels would make charitable bequests more expensive and could significantly reduce charitable giving. "Any further weakening of the estate tax from 2009 levels," said IS, "would diminish an essential source of revenue to the charitable community and thereby weaken our ability to address the needs of the individuals and communities we serve."
Williams, Grant.
“House and Senate Differ on Estate-Tax Provisions.”
Chronicle of Philanthropy
4/03/09.
Primary Subject: Philanthropy and Voluntarism
Secondary Subject(s): Public Affairs
Location(s): National
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