OCTober 9, 2000

Tax Tid-Bits
New Bill Would Offer Immediate Estate Tax Relief

House Democrats have introduced a new plan to provide immediate estate tax relief. According to House Ways and Means Committee member John S. Tanner, the President would likely enact this bill, which is being presented as a "middle ground" between the Republicans’ defeated estate tax repeal bill and its limited Democratic substitute.

The plan’s proponents say it would

• Eliminate the burdensome qualified family-owned business interest qualification requirements,
• Double the unified credit exemption and gradually increase the credit to $4 million per couple,
• Immediately reduce all estate tax rates by 20%,
• Index the unified credit exemption for inflation,
• Free small businesses and family-owned farms and ranches from costly estate planning expenses, allowing for more investment in the business, farm, or ranch,
• Increase the number of partners in a firm from 15 to 75 for the purpose of qualifying as an interest in a closely held business that would be eligible for deferral and installment payment of the estate tax.

Representative John Spratt (D-SC) commented, "It can become law if the Republican leadership wants it to be. All they’ve got to do is put it in the tax package that we’ll probably pass before we leave here and send it to the White House. And it will become law, and people will have substantial relief on January 1, 2001."