HAI's RotorNews reported in August the release by the U.S. Senate Finance Committee of a tax-extender bill. Senate leadership is now mulling over whether to bring it to the floor for consideration, with some Senate Republicans saying they would prefer to deal with the tax extender package in conjunction with an extension of the George W. Bush-era tax cuts - actions likely to be put off until after the November elections.
Following passage expected next week in the Senate of a continuing spending resolution to keep the government funded for an additional six months past October 1, Democratic Senate majority leader, Sen. Harry Reid (Nev.), has made clear that once the Senate votes on the spending resolution, the chamber is unlikely to accomplish anything else this session until after the elections. Reid plans to "run out the clock" on a veterans jobs bill that is up for consideration this week.
The warnings from both sides of the political spectrum over the perils of the fiscal cliff are clear: if Congress does not act by the beginning of next year, tax increases and spending cuts are forecast to throw the country into "significant recession" and lead to the loss of 2 million jobs.
The estate tax issue has become a topic of conversation again in Washington since Senate Democrats deleted an estate tax "fix" from their election-year tax legislation in July. Under a deal reached in 2010, the current top rate paid by estates worth more than $5.12 million is 35 percent. Howeer, if the Senate-passed bill were to become law and no other action is taken, the tax would soar to 55 percent on estates worth more than $1 million. That rate will also kick in if Congress does not act during the lame duck session to address the expiring Bush tax cuts.
The Joint Committee on Taxation estimates that just 200 businesses and 100 farms or ranches will be affected this year. However the committee says that a 55 percent tax on estates worth more than $1 million would hit thousands of additional American families who own that much in farms and farming equipment, business assets, or personal savings. According to the committee, the total number of taxable estates would leap from 3,600 to 55,200. The White House has proposed a $3.5 million per person exemptiomn with a 45 percent top rate.