Estate Tax Changes may be Slipped into Pension Legislation
Republican lawmakers, who so far have been unable to win Senate approval of either full estate tax repeal or a significant reduction in the tax that wealthy heirs pay, are now considering another tactic: slipping estate tax “reform” into a pension bill now in a House-Senate conference committee.
The pension legislation, H.R. 2830, which seeks to put the nation’s defined benefit pension plans on a sounder footing, is being finalized by a conference committee reconciling different House and Senate versions.
The “primary advocate” for attaching estate tax reform to the pension bill, according to the National Underwriter, an insurance industry publication, is Sen. Trent Lott (R-MS). Lott said he doubts that a deal on reducing the estate tax can emerge in the Senate, and so is viewing the pension bill conference report as an alternative vehicle.
“Conference reports are not amendable, and this would be a circuitous way to move estate tax reform forward without providing opportunity for consideration of alternatives on the Senate floor,” said David Stertzer, chief executive of the Association for Advanced Life Underwriting.
But such a last-minute inclusion of estate tax provisions could doom the contentious pension bill, which has taken months to hammer out. “Adding additional controversial issues to the package could kill the chances for enactment this year,” said Kenneth Cohen, senior vice president and deputy general counsel of the Massachusetts Mutual Life Insurance Company.
The latest Republican compromise proposal on the estate tax would exempt any individual estate under $5 million from the tax ($10 million for couples) and would lower the tax rate to a sliding scale starting at 15 percent and rising to 30 percent for estates over $30 million. These changes would cost the U.S. Treasury about 80 percent as much as full repeal, or about $800 billion over the first ten years in which its budgetary effects would be fully felt, according to the Center on Budget and Policy Priorities.
Source: elderlawanswers.com