WASHINGTON, JULY 29, 2006 - "Our tax code should be made simpler and more fair, and one of the most unfair taxes on the books is the one that taxes you after you are dead," stated Rep. Cliff Stearns (R-Ocala). "If we fail to act, the tax relief we provided from the estate and gift tax will expire at the end of 2010."
The Estate Tax and Extension of Tax Relief Act increases the estate and gift tax exemption amount to $5 million per person and indexes that amount to inflation. The $5 million per person exemption amount is fully phased-in effective January 1, 2015. It also reduces estate and gift tax rates. Amounts up to $25 million will be taxed at the same rate as capital gains (currently 15 percent, set to increase to 20 percent in 2011 unless extended). Amounts over $25 million will be subject to a phased-in reduced rate of 30 percent, which would become fully phased-in January 1, 2015.
"This measure also extends through 2007 the state and local sales tax deduction," explained Stearns. "Nine states, including Florida, do not have income taxes, instead using a state sales tax. The Tax Reform Act of 1986 had ended the deduction for state and local sales taxes, but provided for the deduction of state income taxes, creating an unfair situation for those in states without income taxes." In 2004, Stearns garnered the support of the entire Florida delegation in signing a letter calling on Congress to support this deduction, which was approved that year and extended for one year in 2005.
For Further Information Please Contact Paul Flusche at 202-225-5744 or Email.
