The tense debate regarding the 2001 tax cut expiration date holds serious implications for agents and brokers. Some fear that action may not be taken before the cuts expire at the end of the year, which IIABA said would have a disastrous effect on membership.
Allowing the cuts to expire will cause income tax rates for those high-earning families and individuals to rise from 36 to 39 percent. Comparatively, the estate tax would spring back to 2001 levels, including a 55 percent top tax rate and a $1 million personal exemption.
Democrats proposed a bill, S. 3393, establishing a $3.5 million per person with a 45 percent top rate. Once the election year ends, many tax practitioners suspect that Congress will either decide to retain the current system or return to the 2009 levels.
Agencies and brokerages tend to be small businesses paying taxes at individual rates. They often are family-owned. If the estate law expires, many of these businesses face liquidation and job losses. IIABA is working with Congress with hopes of extending the law before the year ends.
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