After the Senate stalled on repealing the estate tax earlier this month, House Ways and Means Committee chairman Bill Thomas (R-CA) introduced H.R. 5638: the “Permanent Estate Tax Relief of 2006.” While not a repeal of the so-called “death tax,” the bill does allow for substantial reductions, including: elimination of existing provisions that reduce estate tax to zero in 2010; reunification of estate and gift tax credit amounts; increase of exemption to $5 million per person ($10 million per couple) by 2010; imposition of capital gains rates on estates under $25 million, and twice those rates (30 %) for estates over $25 million.

The House passed the bill last week (modified to inflation-index the $5 million exclusion). The Senate vote is due this Wednesday or Thursday. For the most current status of the legislation, go to http://www.gop.gov/Committeecentral/bills/hr5638.asp.