President Obama seeks in his new budget to raise the estate tax, which was permanently lowered in the Jan. 1 “fiscal cliff” deal between the administration and congressional Republicans.
Mr. Obama’s proposal would reinstitute the estate tax in 2018 at tax rates imposed in 2009, when about 3 in 1,000 people were subject to the tax. It would raise about $79 billion over 10 years.
The plan would drop the per-person exemption to $3.5 million from $5.25 million this year, and raise the top tax rate to 45 percent from 40 percent.
“As part of the end-of-year ‘fiscal cliff’ agreement, congressional Republicans insisted on permanently cutting the estate tax below those levels, providing tax cuts averaging $1 million per estate to the very wealthiest Americans,” the White House said in its budget. “It would also eliminate a number of loopholes that currently allow wealthy individuals to use sophisticated tax planning to reduce their estate tax liability.”
Acting Budget Director Jeffrey Zients said the proposal is “responsible fiscal policy.”