Estate tax levels would return to 2009 levels under the Obama administration's first proposal to Republicans on how to avert the fiscal cliff.
The administration proposal on the estate tax was part of a plan presented Thursday by Treasury Secretary Timothy Geithner to House Speaker John Boehner.
In general, it calls for $1.6 trillion in tax increases over 10 years, $50 billion in immediate stimulus spending, home mortgage refinancing and a permanent end to congressional control over statutory borrowing limits.
The first reaction from insurance agents—who will be primarily affected by whatever is decided—is that what is important is certainty, that Congress must adopt policies that are permanent and don't change every two years, as is the current situation.
"Obama's proposal clearly shows, in our opinion, that even if we get a final package, nothing is likely to be completed for at least a few weeks, as this is just the beginning of the give and take of the negotiations," said Joe Lieber of Washington Analysis. This group advises the buy-side of the investment community, institutional investors and hedge funds.
"We wait to see if and when House Speaker John Boehner, R-Ohio, follows through with a more comprehensive plan of his own that counters the President's," Lieber said.
He noted that Thursday, "Boehner pointed to the House-passed budget as his template, which is of course a non-starter for Democrats."
Lieber added, "It remains to be seen, however, if [Boehner] will actually offer up a detailed fiscal cliff-only proposal."
Robert Smith, president of the National Association of Insurance and Financial Advisers (NAIFA), reiterated NAIFA's support for "meaningful, sustainable estate tax reform that provides certainty for clients to do their planning and take action."
Unfortunately, he said, "the enormous uncertainty in the political environment, and rules that are not permanent, presents greater challenges for NAIFA members to serve their clients."
