Reform bill up for a vote this week.
The U.S. Senate is expected to vote this week on legislation that
would cut the estate tax and extend other tax break measures.
The legislation would permanently increase the estate tax
exemption to $5 million per person. Estates up to $25 million would be subject
to tax at the capital gains tax rate (currently 15 percent). Estates of $25
million or more would be subject to a phased-in reduced tax of 30 percent. Under
current law, the estate tax will be gradually phased out until it is fully
eliminated in 2010. However, the tax would return a year later.
The bill up for vote also contains a measure to extend a number of
tax breaks through 2007, including the work opportunity tax credit, the research
and development tax credit and the state sales tax deduction. The tax measures
were tied to a bill to increase the minimum wage from $5.15 per hour to $7.25,
over three years. It was approved in Congress last week by a vote of
230-180.
—Tim Chan
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