Senate GOP pushes estate tax vote
WASHINGTON -- Senate Republicans will push for a vote this week on permanently repealing the estate tax even though the GOP appears to lack enough support to get past Democrats' objections.
The tax has fallen as a result of gradually escalating exemptions and decreasing rates since President Bush's tax cut in 2001.
In 2010, the tax will disappear. But without action by Congress, it will return with a vengeance in 2011, when the top tax rate on estates reverts to 55 percent and the exemption shrinks to $675,000.
This year the top rate is 47 percent, and the first $1.5 million left to heirs is not taxed.
A small group of Republicans and Democrats has worked for months on a compromise that would limit the tax, called the ''death tax" by some, to only the wealthiest families.
Farming, ranching, and business organizations that want the tax removed are keeping close watch. They want Senate GOP leaders to gauge support for repealing the tax permanently before accepting any compromise.
''We believe it would be a serious mistake and exceptionally difficult to again explain to small business, if a compromise is advanced without first giving the small business community the opportunity to actively put their resources to the task of delivering the votes for full repeal," a coalition of groups wrote Senate majority leader Bill Frist, Republican of Tennessee.
Lobbyists and lawmakers acknowledge that they are several votes short of the 60 needed in the Senate to clear potential Democratic obstacles to a permanent repeal. The House passed a bill in April that would abolish the tax.
Republican Senator Jon Kyl of Arizona and Democratic Senator Max Baucus of Montana, calculating where the votes are, have been negotiating with other senators in hopes of striking a deal.
Groups seeking a repeal say it has been difficult to pin senators to a position on the tax while they talk compromise.
''If you're trying to have it a little bit of both ways, then you won't commit unless you have to commit. That's just how it works," said Dan Danner, executive vice president at the National Federation of Independent Business. ''That's why we'd like to see a vote."
Most estates are exempt from the tax. The most recent statistics from the Internal Revenue Service indicate that just over 2 percent of people who died in 2001 left estates subject to taxation.
Those who want to leave the tax in place say its repeal gives billions of dollars to wealthy families at the expense of others who might be helped through government programs or other tax breaks paid for with money from the inheritance tax.
''Way too many senators are more focused on the three wealthy donors they have met at their last fund-raiser than they are at the millions of their constituents who will pay higher debt or get less Medicaid or Social Security benefits," said Gene Sperling, economic adviser to President Clinton and now a senior fellow at the liberal Center for American Progress.
Farm, ranch, and business owners say the tax can ruin enterprises they want to pass to their families and force them into expensive estate planning.
The discussions have centered on the combination of elements that would exempt a bigger chunk of estates from taxes and lower the rate, while getting support from 60 or more senators.
