In House to Begin Extension of Bush Tax Cuts in April (Bloomberg, 3/16/10), Ryan J. Donmoyer reports about Rep. Sander Levin’s intent with regards to the federal estate tax. Rep. Levin is the acting chairman of the House Ways and Means Committee, and he is considering retroactively reviving the federal estate tax. Rep. Levin mentions the possibility of letting taxpayers choose the regime -- modified carryover basis or step-up in basis -- that is more beneficial for them:
Levin also said the committee would begin work to retroactively reinstate a federal tax on multimillion-dollar estates that expired Dec. 31. . . .
“The sooner we do it, the better,” Levin said. The lapse of the levy and a complicated capital gains tax that replaced it was making it hard for families to plan their affairs, he said.
One possibility being considered, he said, would let heirs choose to pay the capital gains tax that replaced the estate levy if that is more beneficial. “We have to write it so we don’t disrupt estate planning in this country,” he said.
Rep. Levin suggests that estate planning has not been disrupted in this country. It seems he has a different way of measuring the chaos brought by uncertainty. Also, Rep. Levin’s comments invite practitioners to create enormous dynasty trusts, as such planning might not be disrupted. So, while Rep. Levin “told reporters today the committee would let lapse lower tax rates for high-earners,” he might be quietly providing high-earners an enormous tax break.
Kim Dixon’s article -- Tax cuts for wealthy should expire-US panel chair (Reuters, 3/16/10) -- adds one additional item: “Levin also said he backs extending the 2009 estate tax policy for 2010.”
Jay Heflin also summarizes the news in Levin outlines committee agenda (The Hill, 3/16/10):
On the estate tax, the chairman supports extending 2009 law. He also backs giving taxpayers a choice in either complying with current estate tax rules or abiding by what Congress eventually passes. He hedged on whether he would support a lower estate tax, like the one being discussed in the Senate that offers a 35 percent tax rate and $5 million exemption.
He hopes to address the estate tax soon, saying people need consistency in the law to plan effectively.