By Ryan J. Donmoyer March 16 (Bloomberg) — The House Ways and Means Committee will start next month the process of extending former President George W. Bush’s tax cuts that benefit American families earning under $250,000 annually, Representative Sander Levin said. Levin, a Michigan Democrat who is acting chairman of the tax-writing House panel, told reporters today the committee would let lapse lower tax rates for high-earners. “We’re ready to fight over the issue of extending the middle-class tax cuts and not continuing those for very wealthy families,” said Levin. He said he hopes the committee can begin deliberations on the matter when Congress returns the week of April 5 from a spring break. The committee’s plan would retain a top marginal tax rate of 28 percent for individuals who earn less than $200,000 and couples who earn less than $250,000. Those rates are scheduled to expire at the end of this year. The top marginal tax rates for those who earn above those amounts would increase to 36 and 39.6 percent from a current 33 and 35 percent, respectively. Under a proposal by President Barack Obama , people below the income thresholds would continue to pay a top 15 percent rate on capital gains on dividends. That rate would increase to 20 percent for high-earners. Estate Tax Levin also said the committee would begin work to retroactively reinstate a federal tax on multimillion-dollar estates that expired Dec. 31. The legislation would likely seek an extension of a 2009 law, which applied a 45 percent tax rate on the value of estates that exceeded $3.5 million per individual. “The sooner we do it, the better,” Levin said. The lapse of the levy and a complicated capital gains tax that replaced it was making it hard for families to plan their affairs, he said. One possibility being considered, he said, would let heirs choose to pay the capital gains tax that replaced the estate levy if that is more beneficial. “We have to write it so we don’t disrupt estate planning in this country,” he said. The estate tax was replaced Jan. 1 with a capital gains tax that requires heirs pay rates of between 15 percent and 28 percent on any bequeathed assets they sell. Estate planners say the tax is complicated because it applies to all profit since the assets were acquired by their original owners. To contact the reporter on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net
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House Is `Ready to Fight’ to Extend Tax Cuts for Middle Class, Levin Says
