Thursday, June 22, 2006

Estate Tax Compromise?

A couple of weeks ago I mentioned a New York Times story that said "negotiators appeared unable to reach [an estate tax] deal before the end of this week — if ever." Greg Mankiw reports that "ever" may be here soon. The latest proposal would (a) increase the exemption amount to $5 million per person starting in 2010, (b) reduce the rate on estates up to $25 million to the capital gains tax rate (currently 15 percent), and (c) reduce the rate on estates of $25 million or more to twice the capital gains rate. Mankiw says "this legislation could get the necessary 60 votes in the Senate and put an end to the tremendous uncertainty now surrounding the future of the estate tax."