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Estate Tax Repeal Goes Down to Defeat
- June 9th, 2006
The Republican push to permanently abolish the estate tax has failed in the Senate, and Republican hopes for a compromise that would still exempt many wealthy Americans from paying the tax appeared to grow dimmer in a highly partisan political climate.
The Senate voted 57-41 to cut off debate and move to a vote on complete repeal, but this was three votes shy of the 60 needed. Senators Lincoln Chafee of Rhode Island and George Voinovich of Ohio were the only Republicans to vote against cutting off debate, while Democrats Max Baucus of Montana, Blanche Lincoln of Arkansas, Ben Nelson of Nebraska and Bill Nelson of Florida sided with the majority of Republicans to force a vote.
GOP lawmakers hope to achieve a vote on a "compromise" that would substantially slash the tax, but observers say that such a deal will be difficult in an election year when Democrats have high hopes of winning back control of at least one chamber of Congress. "The Senate's pretty partisan right now," said Sen. Trent Lott (R-MS).
The House voted in April 2005 to repeal the estate tax, which more than 99 percent of American families are not rich enough to pay. The Senate was on the brink of following suit when Hurricane Katrina struck and GOP leaders postponed a vote on a measure that would cost the U.S. Treasury $1 trillion.
Currently, only estates worth more than $2 million are taxed by the federal government. The threshold is scheduled to rise to $3.5 million in 2009. For the year 2010, estates will be entirely free from federal taxation. However, the law that includes this provision expires at the end of 2010. Thus, unless Congress acts in the interim, the estate tax exemption will then revert to $1 million.
In its current form, the tax will affect about 12,600 estates this year, according to the Tax Policy Center.
"This is the ultimate special-interest bill," said Sen. Richard J. Durbin (D-IL).
But Sen. Jon Kyl (R-AZ), a leading backer of repeal, said the tax indirectly affects many citizens who pay estate planners so their heirs won't have to pay it.
For an article in the San Francisco Chronicle on the repeal vote, click here.
For prior ElderLawAnswers news articles on estate tax repeal, enter "estate tax" in the "Search for More Articles" box at the upper right.
For more information on estate taxation, click here.
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Ron M. Landsman, P.A.
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