Breaking News:

Estate Tax Repeal Approved by House Committe

By year 2011, the estate tax will be history. Starting with next year’s reduction of 2 percentage points, down from 55% to 53%, the estate tax will be completely phased out by the beginning of the second decade of this century.

Democrats are still strongly opposing this legislation; calling it another tax break for the rich courtesy of the republicans. Estate tax only affects 2% Americans each year and this figure will only lessen next year when the exemption threshold reaches $1 million.

Still it’s a legislation that many people have been lobbying for years and Bill Clinton never wanted to approve it the way the House Ways and Means Committee had presented to him last year. He wanted to hand out the breaks to the Farmers and other small business owners who have to sell their businesses in order to pay this tax once the original owner dies.

The bill also costs $73 billion less than the one proposed by Bush. The price tag on this bill is $193 billion and the difference in price is caused by longer phase out period and increasing the capital gains tax on the basis of the inherited property that is being sold. This will only apply to large estates.

Other news: Congress also approved tax cuts for married couples on March 29th, 2001. The tax cuts will cost close to $400 billion in the next 10 years.