President Barack Obama has recently inked an estate-tax legislation backed by the National Automobile Dealers Association that includes a provision that enforces a maximum 35% tax rate on estates of over $5 million for each individual and $10 million for couples.
This estate-tax provision is set to take effect for 2011 and 2012 and is part of a broad tax-cut package that the U.S. Congress had recently approved.
Earlier, Obama and congressional Republicans had entered an agreement. In early December, it was sent to Congress and it was later passed by the Senate. Many disapproved of the estate-tax portion, saying that it was biased to the rich.
Many House Democrats had worked to raise the maximum rate to 45% on estates of more than $3.5 million for individuals and $7 million for couples; however, their efforts had failed. This had been the 2009 rate. On the other hand, NADA had lobbied for the bigger exemption and the lower tax rate that was recently approved.
It only lost its aim for the provision to be made permanent instead of just two years. NADA spokesman Bailey Wood said that the temporary fix will enable dealers to plan for the future.
Wood said that they had advocated for the largest exemption since dealers have already paid tax once when it was income. Wood pointed out that about half of all U.S. dealerships are family-owned. [via autonews - sub. required]