BY MATTHEW R. FARRELL

NEWJERSEYNEWSROOM.COM

Senate Democrats have dropped provisions for the estate tax supported by President Obama from their proposed tax plan in a bid to ensure party unity on the vote. The plan involves extending the George W. Bush tax cuts. While the Republican version of the bill would extend them all, including a 35 percent tax on inheritances over $5 million, the Democratic plan extends the tax cuts only for 98 percent of Americans, while letting tax cuts expire for individuals making more than $200,000 yearly and couples making more than $250,000, according to Bloomberg Business Week.

By disregarding the current estate tax cut, the Democratic plan would restore it to a 55 percent tax on inheritances of more than $1,000,000. The original plan called for a partially extended estate tax cut of 45 percent on inheritances of more than $3.5 million.

Only 10 Democrats voted for the estate tax as it now stands when it was passed in 2009. By striking something very unpopular with the party from the plan, majority leader Harry Reid hoped to show the Republican minority a united front, but there is a problem. Eight of those Democrats are still in the Senate. Now they are unsure whether they will turn back on their original decision to support the Bush-era estate tax cut and side with their party.

Even if the Democrats do get all of their Senators to sign on, they still wouldn’t have enough votes to pass the bill. They have only 53 seats and 60 are required. In all likelihood, a real tax deal is not expected until months from now, according to Bloomberg BNA.

According to Bloomberg Business Week, the current Democratic tax plan would raise $40.5 billion from 52,500 estates; their original plan would have raised $21 billion from 7,000 estates. The Republicans alternative’s lighter estate tax would raise $13.5 billion from 4,000 estates.