President Obama’s new budget seeks an increase in estate taxes.
Although the ink is barely dry on the American Taxpayer Relief Act of 2012 (the “2012 Tax Act”) which became effective in January of 2013, President Obama’s new budget includes a proposed increase to estate and gift taxes. Under current law, which was enacted as part of the “Fiscal Cliff” negotiations, estates are subject to a 40% tax on values in excess of $5,250,000. In his recent budget proposal, the President would reduce the estate/gift exemption to $3,500,000 and increase the applicable tax rate to 45% of any amount that exceeds that exemption amount.
In the April 16, 2013 edition of the Wall Street Journal, the editors comment unfavorably on the President’s proposal and opine that the GOP is certainly going to resist the President’s efforts to change existing law.
The editors go on to observe that it is too soon to know if the President is serious about this part of his budget initiative or if the proposal is simply a bargaining chip to be exchanged for other provisions in his budget. To read the full article, visit http://online.wsj.com/article/SB10001424127887323346304578422763444261352.html