II 

110TH CONGRESS 

2D SESSION S. 3284 

To amend the Internal Revenue Code of 1986 to permanently extend the 

estate tax as in effect in 2009, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 17, 2008 

Mr. CARPER (for himself, Mr. VOINOVICH, and Mr. LEAHY) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to permanently 

extend the estate tax as in effect in 2009, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. PERMANENT EXTENSION OF ESTATE TAX AS IN 

4 EFFECT IN 2009. 

5 (a) EXCLUSION EQUIVALENT OF UNIFIED CREDIT

6 EQUAL TO $3,500,000.—Subsection (c) of section 2010 

7 of the Internal Revenue Code of 1986 (relating to unified 

8 credit against estate tax) is amended to read as follows: 

9 ‘‘(c) APPLICABLE CREDIT AMOUNT.— 


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1 ‘‘(1) IN GENERAL.—For purposes of this sec2 tion, the applicable credit amount is the amount of 

3 the tentative tax which would be determined under 

4 section 2001(c) if the amount with respect to which 

5 such tentative tax is to be computed were equal to 

6 the applicable exclusion amount. 

7 ‘‘(2) APPLICABLE EXCLUSION AMOUNT.— 

8 ‘‘(A) IN GENERAL.—For purposes of this 

9 subsection, the applicable exclusion amount is 

10 $3,500,000. 

11 ‘‘(B) INFLATION ADJUSTMENT.—In the 

12 case of any decedent dying in a calendar year 

13 after 2010, the dollar amount in subparagraph 

14 (A) shall be increased by an amount equal to— 

15 ‘‘(i) such dollar amount, multiplied by 

16 ‘‘(ii) the cost-of-living adjustment de17 termined under section 1(f)(3) for such 

18 calendar year by substituting ‘calendar 

19 year 2009’ for ‘calendar year 1992’ in sub20 paragraph (B) thereof. 

21 If any amount as adjusted under the preceding 

22 sentence is not a multiple of $10,000, such 

23 amount shall be rounded to the nearest multiple 

24 of $10,000.’’. 


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1 (b) MAXIMUM ESTATE TAX RATE EQUAL TO 45 PER2 CENT.— 

3 (1) IN GENERAL.—Subsection (c) of section 

4 2001 of the Internal Revenue Code of 1986 (relating 

5 to imposition and rate of tax) is amended— 

6 (A) by striking ‘‘but not over $2,000,000’’ 

7 in the table contained in paragraph (1), 

8 (B) by striking the last 2 items in such 

9 table, 

10 (C) by striking ‘‘(1) IN GENERAL.—’’, and 

11 (D) by striking paragraph (2). 

12 (2) CONFORMING AMENDMENT.—Paragraphs 

13 (1) and (2) of section 2102(b) of such Code are 

14 amended to read as follows: 

15 ‘‘(1) IN GENERAL.—A credit in an amount that 

16 would be determined under section 2010 as the ap17 plicable credit amount if the applicable exclusion 

18 amount were $60,000 shall be allowed against the 

19 tax imposed by section 2101. 

20 ‘‘(2) RESIDENTS OF POSSESSIONS OF THE

21 UNITED STATES.—In the case of a decedent who is 

22 considered to be a ‘nonresident not a citizen of the 

23 United States’ under section 2209, the credit al24 lowed under this subsection shall not be less than 

25 the proportion of the amount that would be deterVerDate Aug 31 2005 07:03 Jul 18, 2008 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3284.IS S3284

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1 mined under section 2010 as the applicable credit 

2 amount if the applicable exclusion amount were 

3 $175,000 which the value of that part of the dece4 dent’s gross estate which at the time of the dece5 dent’s death is situated in the United States bears 

6 to the value of the decedent’s entire gross estate, 

7 wherever situated.’’. 

8 (c) MODIFICATIONS OF ESTATE AND GIFT TAXES TO

9 REFLECT DIFFERENCES IN UNIFIED CREDIT RESULTING

10 FROM DIFFERENT TAX RATES.— 

11 (1) ESTATE TAX.— 

12 (A) IN GENERAL.—Section 2001(b)(2) of 

13 the Internal Revenue Code of 1986 (relating to 

14 computation of tax) is amended by striking ‘‘if 

15 the provisions of subsection (c) (as in effect at 

16 the decedent’s death)’’ and inserting ‘‘if the 

17 modifications described in subsection (g)’’. 

18 (B) MODIFICATIONS.—Section 2001 of 

19 such Code is amended by adding at the end the 

20 following new subsection: 

21 ‘‘(g) MODIFICATIONS TO GIFT TAX PAYABLE TO RE22 FLECT DIFFERENT TAX RATES.—For purposes of apply23 ing subsection (b)(2) with respect to 1 or more gifts, the 

24 rates of tax under subsection (c) in effect at the decedent’s 


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1 death shall, in lieu of the rates of tax in effect at the time 

2 of such gifts, be used both to compute— 

3 ‘‘(1) the tax imposed by chapter 12 with respect 

4 to such gifts, and 

5 ‘‘(2) the credit allowed against such tax under 

6 section 2505, including in computing— 

7 ‘‘(A) the applicable credit amount under 

8 section 2505(a)(1), and 

9 ‘‘(B) the sum of the amounts allowed as a 

10 credit for all preceding periods under section 

11 2505(a)(2). 

12 For purposes of paragraph (2)(A), the applicable 

13 credit amount for any calendar year before 1998 is 

14 the amount which would be determined under sec15 tion 2010(c) if the applicable exclusion amount were 

16 the dollar amount under section 6018(a)(1) for such 

17 year.’’. 

18 (2) GIFT TAX.—Section 2505(a) of such Code 

19 (relating to unified credit against gift tax) is amend20 ed by adding at the end the following new flush sen21 tence: 

22 ‘‘For purposes of applying paragraph (2) for any calendar 

23 year, the rates of tax in effect under section 2502(a)(2) 

24 for such calendar year shall, in lieu of the rates of tax 

25 in effect for preceding calendar periods, be used in deterVerDate Aug 31 2005 07:03 Jul 18, 2008 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3284.IS S3284

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1 mining the amounts allowable as a credit under this sec2 tion for all preceding calendar periods.’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to estates of decedents dying, gen5 eration-skipping transfers, and gifts made, after Decem6 ber 31, 2009. 

7 (e) ADDITIONAL MODIFICATIONS TO ESTATE TAX.— 

8 (1) IN GENERAL.—Subtitles A and E of title V 

9 of the Economic Growth and Tax Relief Reconcili10 ation Act of 2001, and the amendments made by 

11 such subtitles, are hereby repealed; and the Internal 

12 Revenue Code of 1986 shall be applied as if such 

13 subtitles, and amendments, had never been enacted. 

14 (2) SUNSET NOT TO APPLY.— 

15 (A) Subsection (a) of section 901 of the 

16 Economic Growth and Tax Relief Reconciliation 

17 Act of 2001 is amended by striking ‘‘this Act’’ 

18 and all that follows and inserting ‘‘this Act 

19 (other than title V) shall not apply to taxable, 

20 plan, or limitation years beginning after Decem21 ber 31, 2010.’’. 

22 (B) Subsection (b) of such section 901 is 

23 amended by striking ‘‘, estates, gifts, and trans24 fers’’. 

25 (3) REPEAL OF DEADWOOD.— 


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1 (A) Sections 2011, 2057, and 2604 of the 

2 Internal Revenue Code of 1986 are hereby re3 pealed. 

4 (B) The table of sections for part II of 

5 subchapter A of chapter 11 of such Code is 

6 amended by striking the item relating to section 

7 2011. 

8 (C) The table of sections for part IV of 

9 subchapter A of chapter 11 of such Code is 

10 amended by striking the item relating to section 

11 2057. 

12 (D) The table of sections for subchapter A 

13 of chapter 13 of such Code is amended by strik14 ing the item relating to section 2604. 

15 (f) SENSE OF THE SENATE REGARDING REVENUE

16 NEUTRALITY.—It is the sense of the Senate that any re17 duction in Federal revenues resulting from the provisions 

18 of, and amendments made by, this section should be fully 

19 offset. 

Æ 


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