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Earlier this week, the House passed the bankruptcy reform bill, which now goes to the President. Consider it a done deal. Perhaps of even greater interest, however, is the fact that in this same session, the House approved a bill to permanently repeal the estate tax, cleverly named the “Death Tax Repeal Permanency Act of 2005.”

Erosion of Estate Tax Is a Lesson in Politics. Hopefully, this bill won’t pass the Senate as it is a direct attack on the progressivity of our tax system. Under current estate tax law (which sunsets in 2010), you can pass $1.5M to your heirs without their owing any estate tax. Anything above the exclusion amount is taxed at a rate that tops out at just under 50%. Barring a repeal, the exclusion amount drops back to $1M in 2011.