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A Couple of Senators, Who Probably Aren’t Yankee Fans, Are Making a Run at This Estate Tax Problem

John Kyl and Blanche Lincoln must have figured that they could not allow one more billionaire (without naming names) get away with dodging the estate tax. The two Senators have introduced a proposal that would set the exemption at $5 million with a tax rate of 35%:

The proposal would require the Senate Finance Committee to amend H.R. 5297, the Small Business Lending bill, to permanently set the estate tax rate at 35 percent, with a $5 million exemption amount phased in over 10 years and indexed for inflation. It would also provide a “stepped up basis” for inherited assets.

“It’s time to take decisive action on the estate tax, and provide the permanent solution that Arkansas’s hardworking farmers and small businesses are desperately seeking,” Lincoln said. “Uncertainty in the estate tax law has caused incredible difficulties for these individuals, which is why I have fought for a quick resolution to the issue that is both permanent and fair. One way to improve upon an already strong legislative initiative that includes tax incentives and a number of other benefits for small businesses is to ensure that we reach a permanent solution on the estate tax to provide small business owners and famers with the certainty they need.”

See how she slipped in the “farmers”? “Small Businesses”? You sure this doesn’t have anything to do with a certain savvy billionaire who figured, “Yeah, 80 is a nice round number. Let’s do this.”

But they’ve got a plan! “The Lincoln-Kyl proposal provides an election for deceased taxpayers to either retain this year’s estate tax rate, which is zero percent with “carry over basis,” or file under the provisions of the new bill.”

[h/t TaxProf]