Currently, estate-tax provisions as amended in late 2010 for 2011 and 2012 establish a $5 million exemption and a maximum 35 percent tax rate.

The language removed from the bill, S. 3393, would have established a $3.5 million per person exemption, indexed for inflation, and a 45 percent top rate.

The bill is sponsored by Sen. Harry Reid, D-Nev., Senate majority leader. It is not expected to reach the 60-vote threshold necessary to clear the legislation for further action. Instead, the purpose for bringing it to the floor is to allow both parties to showcase their position on tax issues.

Doug Siegler, a partner at Sutherland Asbill & Brennan in Washington and a member of Sutherland's Tax Practice Group, acknowledged that the decision to remove the estate tax provisions from S. 3393 appeared to be part of a new Democratic Party strategy to play hardball on tax issues.

“Although no one can predict how the looming expiration of the so-called 'Bush-era tax cuts' will ultimately play out, the withdrawal by Reid of the estate and gift provisions from his middle class tax bill would seem to indicate that there will be a separate fight on the estate and gift tax,” Siegler said.

He explained that a number of Democrats felt “stung” by the concession in 2010 that allowed an increase in the estate and gift exemptions to $5 million and a drop in the top tax rate of 35 percent, “and they may not be willing to make the same concession on these issues this time around.”

Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America, has said that allowing estate-tax rates to revert to the Clinton-era levels would be “punitive” to agents and brokers, with “a staggeringly negative effect on our membership.”

He explained that most agencies and brokerages are small businesses, organized as pass-through entities such as S-Corporations, Partnerships and Sole Proprietorships, meaning that they pay taxes at individual rates. “In addition, many of our small business members are family-owned,” he added. He said allowing current estate-tax law to expire would mean that in many cases a family business would have to be liquidated in order to pay the government.