In April of this year, we wrote that the estate tax debate was heating up (the post is here). Since then, however, Congress has focused the majority of its attention on health care reform (with the occasional foray into environmental regulation), and there's been little movement on the estate tax issue.Last week, a coalition of business groups released a letter that has put estate taxes back in the headlines. The group, which includes the Chamber of Commerce and the American Farm Bureau Association, is advocating a permanent exemption amount of $5 million, with a 35% tax on amounts above $5 million. Ryan Donmoyer, at Bloomberg, has the story here.
The significance of the letter is that it represents a significant change in the business groups' position. Up until now, most of the groups had lobbied for a total repeal of the estate tax. As recently as last January, for instance, Bruce Josten of the Chamber called for sending the estate tax "to the grave once and for all."
Now, however, the business groups appear to have recognized the inevitability of some form of continued estate tax, in light of Democratic control of both houses of Congress. The letter is, therefore, a tactical concession aimed at preserving the groups' larger strategic aims -- (1) a higher exemption amount (to be locked-in rather than fluctuating from year to year) and (2) a lower rate.
