Despite having previously offered proposals to deal with the estate tax, Senate Democrats have now dropped those provision from President Obama's Tax Bill.
Democrats had offered setting the exemption limit to $3.5 million and the maximum estate tax rate at 45%. And they were willing to compromise by allowing the extension of Bush-era tax rates on family income of $250K or less.
Now that the Democrats have removed their proposals, this means that if the proposal by the Republicans to extend Bush-era tax cuts fails to pass Congressional approval, then the tax rate on income over $1 million gets taxed at 55% and the estate tax exemption gets reduced to $1 million.
It is still possible that Democrats will offer another proposal. It is speculated that if they decide to do so that they would most likely extend Bush-era tax cuts, but it would only be for people that have an income of less than $250,000 a year.
For more information on estate taxes and how to deal with them within your estate plans, please consult with a professional estate litigation Attorney.
*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.