U.S. Sen. Mark Pryor says he has a compromise proposal for estate tax reform.
Earlier this month, the Senate defeated a bill that would have substantially cut the estate tax and increased the federal minimum wage. Pryor voted against the proposal.
The bill would have increased the estate tax exemption to $5 million ($10 million for a couple), from the current $2 million level, and reduced the tax rate for the bulk of estates from 46 percent to 15 percent. The changes would have been phased in by 2015 and had different tax rates for estates valued above and below $25 million.
Pryor said his plan would increase the exemption to $5 million and set the tax rate at 35 percent.
"It really takes care of the small business family farm problem we have in the state," Pryor said about his plan. "It doesn't completely fix up everybody, but it makes it so much better for virtually everybody."
He said less than 3 percent of taxpayers actually pay the estate tax.
"We're not talking about the 97, 98 percent who don't pay it," he said. "We're trying to fix it for people in small towns who own a car dealership, own a convenience store (or) have a farm."