WASHINGTON -- Today, Congressman Thaddeus McCotter (MI-11) voted to approve the Permanent Estate Tax Relief Act of 2006. The legislation was passed by a bipartisan vote of 269-156, and if enacted, this estate tax relief bill would give Americans permanency and certainty for their estate tax planning.
The legislation would permanently eliminate the estate tax for 99.7 percent of all Americans. Under current law, the estate tax gradually declines until it is fully eliminated in 2010. However, in 2011, the tax returns in full force, allowing an exemption from the estate tax of $1 million per person, and taxing all other estates under a progressive tax rate structure, topping 55%. The measure would permanently reduce the estate tax on Americans beginning in 2010, by increasing the exemption amount to $5 million per person, taxing estates worth between $5 million and $25 million at a rate equal to the capital gains tax rate (currently 15%). The bill would also unify the estate, gift, and generation-skipping transfer tax, giving individuals greater flexibility to make estate planning decisions during their lifetime.
Before it can become law, the legislation needs to be approved by the Senate and sent to the President for his signature.