Estate Tax Repeal Is Likely Dead, But Reform May Still Be Possible
As the author of a recent piece in Investment News notes, the three leading candidates for president - Republican John McCain and Democrats Barack Obama and Hillary Clinton - all support some degree of reform of the estate tax, though none support an outright repeal, which means that abolition of the tax will likely not survive as an issue after this year's presidential election. Each of the three candidates, however, has endorsed some form of reform plan, although the details of the proposals vary slightly.
Senator McCain's plan is clearly the most generous. The Arizona Senator is on record as supporting an increase of the estate tax exemption to $5 million, lowering the tax rate to 15%, and indexing the exemption amount for inflation. The two Democratic contenders, meanwhile, both have proposed essentially freezing the exemption amount ($3.5 million) and tax rate (45%) at their 2009 levels. Neither supports indexing for inflation. While clearly less taxpayer friendly than Senator McCain's proposal, the Democrats' plan is at least an improvement over the scheme that will be in place in 2011 under current law.
In short - repeal is likely dead for the foreseeable future, but some reform will probably be put into place after this fall's election.
