Senate fails to win support for repeal of estates tax
Senate fails to win support for repeal of estates tax
By Holly Yeager in Washington
Published: June 8 2006 21:32 | Last updated: June 8 2006 21:32. Copyright by The Financial Times
A push by the White House and Republican leaders to repeal the tax on large estates was dealt a serious blow on Thursday when the Senate failed to muster the votes needed to move forward with the legislation.
The House of Representatives passed the repeal last year and Senate approval would have sent the Republican priority to President George W. Bush for his signature.
Instead, the defeat on a procedural vote shifts the focus to a compromise being drafted by Jon Kyl, an Arizona Republican that would reduce the number of estates subject to the tax.
The White House issued a final plea for repeal of what Republicans call the “death tax” just before the Senate vote, calling it “unfair, onerous, and anti-growth”.
But Democrats complained the measure would only benefit the wealthy. “This is unfair,” said Harry Reid, Democratic leader. Four Democrats broke party ranks and voted to move forward with the repeal bill, while two Republicans voted against it.
“Repealing the estate tax during this time of fiscal crisis would be incredibly irresponsible and intellectually dishonest,” said one of those, George Voinovich, an Ohio Republican.
The 2001 tax act included a gradual reduction of the estate tax until it is eliminated in 2010. But that law is set to expire the following year, prompting the push for a permanent repeal.
Mr Kyl’s proposal would increase the value of estates that are exempt from the tax, from the current $2m (€1.56m) per person to $5m. Bill Frist, Republican majority leader in the Senate, had resisted any discussion of the compromise. But after yesterday’s defeat, he signalled a willingness to pursue it.
“This won’t be the last time this year the Senate votes on this important issue – be it on the floor or in some other form,” Mr Frist said. “Getting rid of the death tax is just too important an issue to give up so easily.”
By Holly Yeager in Washington
Published: June 8 2006 21:32 | Last updated: June 8 2006 21:32. Copyright by The Financial Times
A push by the White House and Republican leaders to repeal the tax on large estates was dealt a serious blow on Thursday when the Senate failed to muster the votes needed to move forward with the legislation.
The House of Representatives passed the repeal last year and Senate approval would have sent the Republican priority to President George W. Bush for his signature.
Instead, the defeat on a procedural vote shifts the focus to a compromise being drafted by Jon Kyl, an Arizona Republican that would reduce the number of estates subject to the tax.
The White House issued a final plea for repeal of what Republicans call the “death tax” just before the Senate vote, calling it “unfair, onerous, and anti-growth”.
But Democrats complained the measure would only benefit the wealthy. “This is unfair,” said Harry Reid, Democratic leader. Four Democrats broke party ranks and voted to move forward with the repeal bill, while two Republicans voted against it.
“Repealing the estate tax during this time of fiscal crisis would be incredibly irresponsible and intellectually dishonest,” said one of those, George Voinovich, an Ohio Republican.
The 2001 tax act included a gradual reduction of the estate tax until it is eliminated in 2010. But that law is set to expire the following year, prompting the push for a permanent repeal.
Mr Kyl’s proposal would increase the value of estates that are exempt from the tax, from the current $2m (€1.56m) per person to $5m. Bill Frist, Republican majority leader in the Senate, had resisted any discussion of the compromise. But after yesterday’s defeat, he signalled a willingness to pursue it.
“This won’t be the last time this year the Senate votes on this important issue – be it on the floor or in some other form,” Mr Frist said. “Getting rid of the death tax is just too important an issue to give up so easily.”
posted by Carlos T Mock at 8:46 PM
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