Estate Tax Just One Area in Which Obama, Lawmakers Disagree as End of Year Nears
By Heather M. Rothman, Brett Ferguson,
Cheryl Bolen, Aaron Lorenzo, and Marc Heller
Senate Finance Committee Chairman Max Baucus (D-Mont.) split with President Obama Nov. 30, saying the current estate tax rate should be extended rather than increased at the end of the year.
The White House’s Nov. 29 proposal to avert $607 billion in tax hikes and automatic spending cuts, set to take effect in January, called for the estate tax to be set at the 2009 rate of 45%, with an exemption level of $3.5 million per person. But Baucus told reporters that the estate tax levels for 2013 need to be on par with the 2012 levels of a $5.12 million personal exemption and a 35% tax rate. Absent any congressional action, the tax rate will rise to 55% on Jan. 1, while the exemption level will drop to $1 million per person.
Supporting current estate tax levels is not new for Baucus—he has long supported indexing the current agreement. However, his position does show that on certain tax issues not all Democrats are in lockstep with the White House, as the number of days winds down until the automatic spending cuts and tax increases associated with the fiscal cliff take effect.
Rep. Kevin Brady (R-Texas), a senior member of the House Ways and Means Committee, called Obama’s proposal unacceptable and said Republicans would “fight hard” first to ensure no increases in estate tax liability and later to repeal the tax altogether.