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In a bit of comedy that could only exist in the tax code, the estate tax was supposed to expire at the end of 2009, be nonexistent for 2010, and then reset to pre-Bush-era rates of 55% of your assets, exempting the first $1 million.
But the House voted yesterday to maintain the current 2009 estate tax exemptions and 45% rate for 2010 and beyond. According to Bloomberg, the U.S. House of Representatives voted to prevent the federal estate tax from expiring on Dec. 31 and to permanently exempt couples' fortunes of up to $7 million, eliminating the 2011 sunset provision on the original estate tax law.
It may still expire, of course. For the changes to take effect, the Senate would have to pass its own version, then the two bills would need to be reconciled and signed by the president -- all by the end of the year.
If things move quickly, though, wealthy Americans who die in 2010 will once again have to worry about the estate tax ding. Yet some of the super-rich have long supported the tax. Berkshire Hathaway's (NYSE: BRK-A ) Warren Buffett told Reuters in 2007 that "a progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy."
Back in 2001, when the 2010 repeal first became law, Bill Gates Sr., father of the uber-rich Microsoft (Nasdaq: MSFT ) founder, organized a petition with over 100 supporters arguing that the estate tax should remain in place. Members of the Rockefeller family -- themselves dynastically wealthy through Standard Oil, the former conglomerate whose pieces live on in ExxonMobil (NYSE: XOM ) , Chevron (NYSE: CVX ) , and other big oil names -- signed the petition, as did George Soros and one of the founders of Unilever's (NYSE: UL ) Ben & Jerry's brand.
But yesterday, Republican Rep. Dave Camp told The Washington Post, "Death should not be a taxable event."
It seems that, like many things tax-related, this is an issue split along party lines. What's your take? Let me hear it in the comments section below.