Two Senators Propose Reinstating Estate Tax

From Reuters.com:

Two senators, a Democrat and a Republican, have reintroduced a proposal to reinstate the estate tax, which lapsed this year amid a row among lawmakers over taxing the wealthy when they die.

Democratic Senator Blanche Lincoln and Republican Senator Jon Kyl late on Tuesday reintroduced a plan to tax estates over $5 million at a rate of 35 percent. The estate tax that expired last year had taxed estates at a rate of 45 percent, above an exemption of $3.5 million for individuals and above $7 million for couples.

There is no estate tax in 2010 because lawmakers last year failed to reach a deal to extend the tax. The House of Representatives last year had passed an extension of the 2009 rates, but senators clashed over the level of the tax.

Without action, under current law the tax will rise to 55 percent, with an exemption level of $1 million.

Several billionaires have died this year, escaping the estate tax, including former New York Yankees owner George Steinbrenner.

Senator Sees Big Reporting Gap In Stock Options

Senator Carl Levin of Michigan has discovered what he calls a “huge gap in stock option reporting” that is costing the government billions in lost revenue. Levin is teaming up with Senator John McCain to propose a bill that will prevent this from happening in the future. Check out the Associated Press story on this new development below.

A multibillion-dollar gap between what public companies book as expenses for their executives' stock options and what they report to the IRS under two sets of rules is costing the Treasury billions in lost revenue, a key senator says.

Companies continue to report deductions for stock options to the Internal Revenue Service that far exceed what they are accounting and disclosing to shareholders as hits against their bottom line, Sen. Carl Levin, D-Mich., said Wednesday. He released new IRS data showing that the total gap for corporations in 2008 was $52 billion.

To close the gap, Levin and Sen. John McCain, R-Ariz., have proposed legislation that would require that the tax deduction for stock options not exceed the expense for options reported in financial statements.

On Tackling Debt: Some Say 'Just Do It’

There is certainly no easy fix to the government’s massive debt. However, some Senators are saying that Congress is not making any progress in fixing the problem, and that “business as usual” is not working. Senator Evan Bayh (D-Indiana) has proposed that a special commission be created to force Congress to fix the budget deficit.

"Congress is not willing to take short-term pain for long-term pain," Sen. George Voinovich (R-Ohio) told a Senate Budget Committee hearing Tuesday.

"Pain" in this context is defined as Congress enacting spending cuts and tax increases across the board to rein in the nation's massive debt load.

And the country's long-term debt load is massive: The interest on it alone could total $4.8 trillion between 2010 and 2019.

The proposed solution: "Institutional insurrection," as Sen. Bayh put it. "Business as usual in Washington is not going to solve the problem."

Specifically, Bayh and others are proposing the creation of a bipartisan commission that would come up with ways to cut the deficit and then propose legislation on which lawmakers would vote "yes" or "no." Period.

Continue reading at CNN.com…