Unless Congress acts during the lame duck session, on January 1st the federal estate tax will revert back to a level of 55 percent for estates worth more than one-million dollars.
The so-called “death tax” is currently 35 percent for estates worth more than five-million dollars per individual and ten million dollars per couple.
Iowa Senator Charles Grassley says the outcome of the presidential election will likely determine where the estate tax ends up.
“If Obama is re-elected president, I think based upon his February budget we would have a 3.5 million dollar exemption and a 45 percent rate—because that’s what is in his budget,” Grassley says.
And if Romney is elected?
“I think it will be permanent law at five-million dollars and a 35 percent rate,” says Grassley.
Romney has indicated he would like to eliminate the estate tax completely.