Obama Sets Forth His Deficit Reduction Plan Which Includes Estate and Gift Tax Changes

The Obama Administration has proposed a deficit reduction plan in which “[t]he Administration . . . supports the return of the estate tax exemption and rates to 2009 levels.”  This means that the estate tax applicable exclusion amount would go to $3.5 million (down from $5 million currently) and the gift tax exemption to $1 million, (down from $5 million currently) and the top marginal rates would be 45 percent (up from 35% currently).  Portability of a deceased spouse's unused estate tax applicable exclusion amount would remain under the President's proposal.