The estate tax expired on January 1, 2010. It remains to be seen whether Congress will reinstate it before it returns in 2011...Read more
Senate Rejects Estate Tax Repeal
- June 13th, 2002
The effort to permanently repeal the estate tax was derailed in the U.S. Senate yesterday when the proposal failed to muster the 60 votes necessary to bring it to a floor vote.
The vote was 54 in favor of repeal and 44 against. Forty-one Democrats, one independent and two Republicans opposed letting the bill move forward, while 45 Republicans and nine Democrats supported repeal. Under an agreement, 60 votes were required to bring the issue to the floor. The House of Representatives voted last week to repeal the tax, and Republican backers of the measure promised to make repeal a campaign issue this fall.
The Senate also rejected two Democratic alternatives, one that would have raised the estate tax exemption to $3 million next year and a second that would have exempted virtually all family-owned businesses from the tax.
Under the tax cut enacted last year, the value of assets exempt from the estate tax rises gradually until 2010, when the tax is repealed for one year. If Congress fails to act in the intervening years, the estate tax would then be restored to 2001 levels in 2011. Democrats contend that total repeal would cost $740 billion in the decade after 2010 and would favor only the very rich.
President Bush called the vote a "disappointment to the American people." Republicans said they were pursuing strategies to force another vote on the issue closer to the election
Those opposing repeal expressed hope that a compromise could be reached. "At some point or another, we have to get serious about reform instead of repeal so people can get on with proper estate planning," Gary Bass, who headed a coalition against repeal, told the New York Times. "My guess is we are back at it next year or the year after to find a reasonable approach."
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