Estate tax stuck in Congress

There is still no guarantee that Congress won't reinstate the estate tax retroactive to January 1, 2010. As discussed in previous posts of this blog, the estate tax (AKA death tax) was completely phased out this year, due to a law passed in 2001. The House has passed a bill that re-instates it with a 45% tax rate on everything above $3.5 million. But it is stuck in the Senate. Most senators want a higher exemption level and a lower tax rate. (Maybe that's because most of them will have estates worth more than $3.5 million?) This matter has also been pushed back by a number of other things on the Senate's agenda. If nothing is done, the estate tax will revert back to its 2001 level: a top tax rate of 55% and an exemption of only $1 million. Probably the vast majority of Senators and Congressmen have potential estate worth more than $1 million (just guessing here), so the odds are good that something will be in place for 2011. At least that's the conventional wisdom.