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Lincoln-Kyl propose estate tax fix

The American Farm Bureau and National Farmers Union are both calling on the Senate to pass and estate tax plan introduced by Blanche Lincoln of Arkansas and Jon Kyl of Arizona. The proposal would permanently set the estate tax rate at 35 percent with a $5 million exemption phased-in over ten years. That phase-in is a change from previous legislation introduced by the two Senators and is meant to reduce the short-term cost of the bill.

Presented as an amendment to the Small Business Jobs and Credit Act of 2010, the plan would also give a choice to estates this year between the current rules – no estate tax, but a capital gains tax imposed when the inherited assets are sold – and the estate tax rates that would be in effect under the Kyl-Lincoln proposal.

The 2001 tax cut law gradually reduced the federal estate tax until it was eliminated for one year, this year. Next year, the tax is scheduled to return to tax estate wealth over $1 million at 55 percent. The White House has proposed setting a 45 percent rate and a $3.5 million estate tax exemption amount.

Read Senator Lincoln’s statement here: