We’ve been visiting Capitol Hill offices over the past couple weeks to talk about the estate tax and its impact on family businesses and now have a clearer idea of where the issue is headed. Here’s our latest intelligence.

As Ways and Means Committee Chairman Charles Rangel (D-NY) announced the other day, he intends to move separate legislation next week making permanent the 2009 estate tax rules, including an exemption amount of $3.5 million per spouse and top tax rate of 45 percent. Having the House move a permanent fix to the estate tax, at least initially, was not what we expected earlier in the year. We were under the impression that House leadership preferred to do something temporary and wait for the big tax bill next year to make any lasting decisions.

We also thought the Senate would be more proactive in pursuing a permanent fix. Wrong again. We continue to hear from Finance Committee staff that Chairman Baucus would like to move a one year extension of 2009 rules and kick this can down the road. Just how that sits with the Republican minority and pro-business Democrats remains to be seen. Why trade one year of repeal for one year of higher taxes? It’s entirely possible that neither side is able to muster the 60 votes needed to move their position along, resulting in a stalemate that allows the currently-planned one year repeal of the estate tax to take place.

Meanwhile, Representative Shelley Berkley (D-NV) introduced the business-friendly Estate Tax Relief Act of 2009 (H.R. 3905) late last week, a bipartisan compromise estate tax bill that would begin with 2009 parameters and then phase in increases in the exemption and reductions in the rate. Under H.R. 3905, each year from 2010 through 2019, the estate tax applicable exclusion amount would increase by $150,000 and the top rate would decrease by 1 percent. Thus, the exemption would start at $3.5 million in 2009, and by 2019, the exemption and rate would be $5 million and 35 percent. This legislation is consistent with the Senate compromise offered by Senators Lincoln (D-AR) and Kyl (R-AZ) and is co-sponsored by fellow Ways and Means Committee members Representatives Kevin Brady (R-TX), Devin Nunes (R-CA), and Artur Davis (D-AL).

Finally, on our Family Enterprise Coalition efforts, we’re making excellent progress educating policymakers on the perils of taxing estates with family-owned businesses more than non-family businesses as well as signing up allies in the business association world. With everybody focused on the rate and exclusion, our point is simple — the tax base matters too, especially to closely held businesses attempting to survive from one generation to the next. We’re up to fifteen trade associations on our letter opposing this so-called “family attribution” concept and expect to send it to the tax writers later this week.