Additionally, the legislation would continue another amendment to the Bush tax cuts: allowing the estate tax exemption to account for inflation. This provision raised the exemption from $5 million to $5.12 million for 2012.

However, the legislation has no hope of passage in the Senate, and President Obama said in a statement that he would veto the bill if it reaches his desk.

Andrew Katzenstein, a partner in the Personal Planning Department with Proskauer in Los Angeles, says that if the Bush tax cuts expire at the end of the year, income-tax rates for the highest-earning individuals and families will rise from 36 to 39 percent, an eight percent increase.

If the estate tax provisions are allowed to expire, there will be an 80 percent drop in the exemption and a 20 percent gross increase in the tax rate.

On Tuesday, the House Ways and Means Committee refused to allow a House vote on the Senate's tax bill, S.3412 (H.R. 15 in the House). That bill, which the Senate passed last week, would phase out the tax cuts at the end of this year except for families earning $250,000 or less.

The Senate had removed language pertaining to estate-tax provisions in its version. Originally, that bill would have established a $3.5 million per person exemption, indexed for inflation, and a 45 percent top rate. The provision was removed to tie extending current estate-tax rates to passage of the entire bill.

Efforts to substitute that bill on the House floor Wednesday failed.

In other tax-related action, the House is scheduled to vote today on legislation, H.R. 6169, that would establish a process designed to pave the way for debate on comprehensive tax code overhaul in 2013. House Ways and Means Chairman Dave Camp, R-Mich., said he plans to use the coming months to hold more hearings on how a tax code rewrite might work.