The NonProfit Times - March 1, 2008 - (Page 9)

ESTATE TAX Continued from page 1 that year. If an estate tax exemption on the first $2 million to $3 million on an individual’s estate had been retained, it would have reduced charitable giving by $1 billion to $2 billion that year, Read said. The CBO study and others found that the estate tax “leads affluent individuals to donate more than they otherwise would, because such donations -- whether made during the life or as bequests at death -- sharply reduce estate tax liability.” Conrad Teitell, chairman of the Charitable Planning Group and principal at Stamford, Conn.-based Cummings & Lockwood, also testified before the committee in November. The Senate hasn’t been able to quite reach the 60 votes necessary for absolute repeal of the estate tax, he said, this year, with a rate of 45 percent above that level. The exemption increases to $3.5 million next year before disappearing altogether in 2010. The tax returns in 2011 at 55 percent with a $1-million exemption. The Joint Committee on Taxation estimates that in 2009 there will be 9,600 estates subject to the estate tax, but almost 62,000 in 2011 after expiring in 2010. “I know for a fact that most of those 62,000 will not be billionaires,” said Sen. Charles Grassley (R-Iowa), ranking member of the Senate Finance Committee.“I have consis- tently maintained that the death tax should be completely repealed, but…I am willing to compromise.” The estate tax “needs serious reform. And I support repeal,” said Senate Finance Chairman Max Baucus (D-Mont.). “For many smaller estates, the problem with the current estate tax is that the law keeps changing.” Speaking at the hearing, billionaire Warren Buffett proposed an exemption of $4 million,indexed for inflation,with a steeper progressive tax rate that taxes the wealthiest estates at a rate above the 45 percent level for 2009. Adam Hughes, director of federal fiscal policy at OMB Watch, a Washington, D.C.-based nonprofit that monitors federal spending and policy, is unconvinced that estate tax reforms will be considered this year, much less acted upon. “The debate over the estate tax has shifted significantly over the last two years or so to focus on more responsible and reasonable reform options,” said Hughes. “These options seek to retain more revenue for important federal investments while instituting a Estate Tax, page 10 THE JOINT COMMITTEE ON TAXATION estimates that in 2009 there will be 9,600 estates SUBJECT TO THE ESTATE TAX so everyone seems to recognize a compromise will be necessary. No one can predict what is going to happen or when, however there could be a mood of compromise, depending on how things look this spring about who’s going to be the party in charge next year, he said.“The situation might be right for compromise and both sides might realize it’s time for a truce,” said Teitell. In follow-up materials he plans to send to the Finance Committee,Teitell suggests the committee report a bill by spring, and urge their colleagues in The House to pass a bill, to have a conference after April and legislation the president could sign by June. “One thing is for sure, and that’s nothing’s for sure, but one thing seems quite clear is they’re not going to repeal the estate tax,”Teitell said.“It may well be they wait until after the election, but you could say both parties will want to get this off the table and go on to other things.” Estates are exempt from tax up to $2 million ($4 million for couples) MARCH 1, 2008 THE NONPROFIT TIMES www.nptimes.com 9 http://www.dialvision.com/npt http://www.dialvision.com/npt http://www.nptimes.com

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The NonProfit Times - March 1, 2008 Fuel Costs Eating Up Food Banks California Legislation Pushing Foundation Funding Diversity Estate Tax Won't Die Contents Who...When...Where...How...What? Red Cross Cuts Jobs, Regional Support In $200 Million Deficit General Ramblings: What the....? Briefs Taxing Issues: New for 2008 Foundations: Rebooting At Gates Mail Drove Donors to Give Online Streetsmart Nonprofit Manager: The Power of the Founder Software: Technology Innovation Calendar Fundraising Guide NPT Jobs Resource Directory AFP International Conference Insert

The NonProfit Times - March 1, 2008

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