Obama to Propose Changes to Taxes on Estates, Punitive Damages

By | May 11, 2009

The Obama administration on Monday will propose raising nearly $60 billion over 10 years through changes to the estate tax law and closing certain domestic tax loopholes, an administration official said.

Funds raised will go to beef up a health care reserve fund, a $634 billion pot of money President Barack Obama wants to use to revamp the health care system and expand insurance to tens of millions of Americans who lack it.

The White House wants to raise $24 billion over 10 years by tightening rules related to the estate tax, a levy on an inherited part of an estate if the value exceeds an exclusion limit set by law.

Currently, the first $3.5 million for an individual, or $7 million for a couple, are exempted.

The changes to the estate tax are related to how assets are valued, said the official, who was not authorized to be quoted.

Other proposals include denying tax deductions for firms with punitive damage claims, the official said.

Later on Monday, the administration will provide details on a series of tax proposals unveiled last week, said to raise $210 billion over a decade, to tighten rules related to overseas investments.

(Reporting by Kim Dixon; Editing by Lisa Von Ahn)

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