“White House Budget Proposes Estate Tax Change”
Among the revenue-raising proposals in the White House’s Fiscal Year 2014 Budget is a return of the Estate Tax to its 2009 level beginning in 2018. The White House Budget Plan also calls for eliminating “a number of loopholes that currently allow wealthy individuals to use sophisticated tax planning to reduce their estate tax liability.”
In January, as part of the fiscal cliff deal, Congress established “permanent” Estate Tax thresholds, including a $5 million individual exemption (now $5.25 million due to inflation) and a 40 percent maximum rate. Under the President’s proposed budget, the exemption would drop to $3.5 million in 2018 and it would not be indexed for inflation. The top Estate Tax rate would rise to 45 percent. The Generation-Skipping Transfer Tax and the Gift Tax would also fall to 2009 levels ($1 million in the case of the Gift Tax). While these proposals are highly unlikely to pass Congress, the future of the Federal Estate Tax bears frequent monitoring.