Estate and Gift Taxes Remain Part of President's Deficit Reduction Plan

The Administration's proposals for deficit reduction includes the statement that “[t]he Administration . . . supports the return of the estate tax exemption and rates to 2009 levels.” This would return the estate tax applicable exclusion amount to $3.5 million and the gift tax exemption to $1 million, and the top marginal rates to 45 percent (down from current exemptions of $5.0 million for both estate and gift tax). Earlier proposals from the Administration would preserve the portability of a deceased spouse's unused estate tax applicable exclusion amount, and this may remain part of the Administration's tax reform proposal. (Office of Management and Budget, “Living Within Our Means and Investing in the Future: The President's Plan for Economic Growth and Deficit Reduction,” (Sept. 2011)