Blogs Derek's Tax Blog Assumed & Indexed
So far H.R. 436 has been the only legislative glimpse into the future of the estate tax. Now, thanks to this article on tax law changes, I have found one more. A “Brief Analysis of President Obama’s FY 2010 Budget,” produced by a group called the U.S. Senate Budget Committee Majority Staff provides additional details on Obama’s estate tax plan, or at least on what Senate staffers for the majority think it means. The staffers say that Obama’s budget assumes that the estate tax, as it is in effect in 2009, would be permanently extended, and indexed to inflation. My review of the President’s budget found the estate tax footnote that maintained the 2009 exemption; however, it did not find a mention of indexing the exemption to inflation. Inflation has been one of my concerns.
Not that we are going to see it right away, but that over time inflation has a way of making tax code that may seem fair become unfair. The alternative minimum tax is an example where a tax targeted at a small percentage of the population has ballooned and become a major revenue source. Well I welcome the thought that the exemption will be indexed and believe that it should be indexed, it will increase the revenue cost of the change.
When and where did indexing come back into the debate? H. R. 436 does not include a provision for indexing the exemption. The President’s budget does not provide this detail. Maybe all we can take from this is that the final form of the estate tax is still in question.