A bipartisan bill that would peg the estate tax to the 2009 level under current law has been introduced in the Senate.

The legislation, S3284, was introduced July 17, 2008, by Sens. Tom Carper (D-DE), Patrick Leahy (D-VT) and George Voinovich (R-OH). It would create a lifetime estate tax exemption of $3.5 million, indexed for inflation, and impose a top tax rate of 45 percent.

Two days earlier, Rep. Jim McDermott (D-WA) introduced an estate tax reform bill in the House. HB6499 would leave the current $2 million estate tax exemption in place, and up the lifetime gift exemption to the same $2 million. 

Under the Economic Growth and Tax Reconciliation Act of 2001, the estate tax will expire for the year 2010, followed in 2011 by an individual exemption of $1 million and a top tax rate of 55 percent, unless Congress acts in the interim.