This week, the death of George Steinbrenner rekindled discussions about the federal estate tax. As you may be aware, there is no federal estate tax for 2010. However, assuming that Congress doesn’t take action, next year the federal estate tax returns with a personal exemption of $1 million and a flat rate of 55%.
Under the current Kyl-Lincoln proposal, the exemption would be increased to $3.5 million (indexed for inflation) with a flat rate of 35%. A prior proposal would have increased the exemption to $10 million. Yet another proposal has suggested a complete repeal. With so many proposals floating about (though none completely seriously, it seems), there’s no clear direction.
Fix the Tax Code Friday question:
What should be done about the federal estate tax?