House Passes Estate Tax Relief/Tax Extenders/Minimum Wage Increase Legislation

By a vote of 230 to 180, the House early on July 29, 2006, passed the Estate Tax and Extension of Tax Relief Bill of 2006 (HR 5970). The bill seeks to resolve the current uncertainty in estate tax planning by creating a $5 million individual estate tax exclusion, increased to $10 million for couples, with portability between spouses. Estates up to $25 million would be taxed at capital gain rates (current maximum 15 percent), while larger estates would be taxed at rates of up to 30 percent.

Also included in the legislation is a package of nearly two dozen extensions and expansions of various tax provisions, many of which had expired at the end of 2005, including the research tax credit, the deduction for state and local sales taxes, the deduction for qualified tuition and fees, the welfare-to-work and work opportunity credits, the deduction for leasehold improvements, the deduction for teachers’ out-of-pocket expenses, and the deduction for charitable contributions of computer equipment.

In an effort to try to attract the votes of Democrats and moderate Republicans, the legislation also incudes an increase in the minimum wage from $5.15 to $7.25 over three years.

The Senate is expected to take up the legislation in the coming week prior to its adjournment for the August recess. It is not clear if the minimum wage provision and extenders package will attract enough Senators who in the past have opposed the estate tax relief provisions to secure Senate passage. Senators concerned about the deficit may also focus on the estimated $300 billion cost of this legislation over ten years, with $268 billion of that cost associated with estate tax relief.


Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

All stories by: Wolters Kluwer Tax and Accounting