Blogs Derek's Tax Blog Obama’s First Tax Increase
The target of the first tax increase of the Obama era is (as predicted) the estate tax. It is not surprising that the estate tax will see the first tax increase, after all candidate Obama promised to freeze it at 2009 levels. However, it is interesting that this tax increase is such a high priority that it is getting attention before he officially takes office. News of this initiative broke Monday in a Wall Street Journal article by Jonathan Weisman. The news has been picked up by a number of blogs, including: freakonomincs at NYT, the Tax Professor, the MinnPost, Florida Trust Blog, Topix, Tax Policy Blog, and Death and Taxes. (Try reading some of the comments on these sites.)
Until we see the actual bill, we won’t know exactly what is included in it. However, there was an Estate Tax bill introduced last week by Rep. Pomeroy. You can read the text of the bill here. It basically keeps that law as is, with the following notable exception: it attempts to limit the use of valuation and minority discounts. This clearly aimed at the use of Family Limited Partnerships and Family Limited Liability Companies. This bill is likely to change once Washington politics get involved. Obama himself has admitted that not everything he promised during the campaign will be able to happen and that due to the economy “Everybody’s going to have to give”. Not everyone is on board with Obama however. U.S. News reports that Speaker Nancy Pelosi still wants to repeal the Bush taxes cuts and doesn’t consider that a tax increase, and that economists and others are against Obama’s tax plans.