Policy Options for Changing the Taxation of Wealth Transfers

CBO:

 The repeal of the estate tax in 2010 followed by the reversion to a $1 million exemption amount has led many policy makers to seek changes to current law. The House-passed legislation (H.R. 4154) would permanently retain the estate and gift taxes at the parameters in place for 2009. In its August 2009 report Budget Options, Volume 2, CBO discussed a number of other options for modifying estate and gift taxes, including permanently extending the law in effect in 2009 (but unlike H.R. 4154, adjusting the exemption amounts for the estate and GST taxes for inflation) and permanently repealing the estate tax. The brief discusses those options, as well as an option to replace the estate tax with an inheritance tax. Adopting one of those options for modifying estate and gift taxes would reduce federal revenues by amounts ranging from $234 billion to more than $500 billion over the 2010-2019 period, according to estimates by the staff of the Joint Committee on Taxation.

Posted via email from Jim Nichols