The Obama administration seeks to raise nearly $60 billion by closing loopholes according to various news reports on May 11, 2009. These potential loophole closings have a potentially significant impact on settlement industry stakeholders
The tax "garrotte" includes items related to the estate tax, and also revived a bid to cap itemized deductions wealthy individuals can claim.
Purportedly the fund raised from the estate tax and other changes would go to beef up a healthcare reserve fund, a $634 billion pot of money President Barack Obama wants to use to revamp the healthcare system and expand insurance to tens of millions of Americans who lack it.
The White House wants to raise $24 billion over 10 years by tightening rules for the estate tax, which affects that portion of an inheritance that exceeds an amount excluded by law ("exempt amount").
Currently, the exemptions are the first $3.5 million of an individual's estate and $7 million of a couple's estate.
Reuters reports that "lawmakers are likely to tackle the estate tax issue this year to avoid confusing changes over the next few years. The tax-cut package enacted under President George W. Bush provides for the estate tax to be repealed for fiscal year 2010 -- October 1, 2009 to September 30, 2010". Beginning fiscal 2011 Estate taxes are scheduled to revert back to an exemption of $1 million and a top rate of 55 percent.
Other tax changes include denying tax deductions for companies with punitive damage claims,
Recognizing that Congress is going to need to find money from somewhere for its ambitious agenda and to impose fiscal discipline, one must recognize that increased planning opportunities and a growing need for solutions will result if these changes come into effect.