Several more pressing issues, including the Iraq war and the Presidential campaign, seem to have pushed discussion of the federal estate and its possible repeal off the radar in Washington, D.C. and in the rest of  the country. We’re now at a point of having a $1,000,000 lifetime gift tax exemption and a $2,000,000 federal estate tax exemption at death, with rates still in the mid-40% range. The exemption will rise to $3,500,000 in a few years, then for one year the tax will disappear (2010- the take Granny on the roller coaster year), after which the rates revert to their levels before the 2001 changes: much higher rates and a much lower exemption. This strange tax situation was thought to be so bizarre that it would certainly be amended, but the change back to the old rates and exemption is automatic in 2011- it doesn’t require any further Congressional action. If the 2008 election results in gridlock, we might see just the doomsday scenario that no one could imagine. If one party will accept only repeal and the other won’t agree to higher exemptions and lower rates, that could be the future of the estate tax.