News - Estate Tax Repeal Defeated, Compromise Package Up for Consideration
Category: Estate and Inheritance Tax
The U.S. Senate voted to block a repeal of the federal tax on multimillion dollar estates, dealing a setback to Republicans and the Bush administration.
The Republican proposal failed to clear the 60-vote threshold necessary to overcome a procedural hurdle. The 57-41 vote ends for now the hopes of opponents that the levy, dubbed a ``death tax'' by Republicans, will be permanently repealed.
Senate Minority Leader Harry Reid, a Nevada Democrat, said Republicans were focusing on a tax that affects less than 1 percent of the population while ignoring higher priority items such as gas prices, uninsured workers, a rising national debt, and an outdated minimum wage.
``The estate tax is not high on the agenda of people in Nevada,'' he said. ``I think we're wasting precious days.''
The Senate was the last hurdle for groups that have lobbied for repealing the estate tax for more than a decade. The House of Representatives voted 272-162 in April 2005 to repeal the tax on a permanent basis, and the Bush administration says it wants to abolish the levy. The Senate fell six votes short of repealing the tax permanently in 2002.
An alternative approach championed by Republican Senator Jon Kyl and Finance Committee Chairman Charles Grassley would only tax estates valued at more than $10 million at rates of between 15 percent and 30 percent.
Reid, a Nevada Democrat, said the alternative proposal is an ``absolute farce'' because it would still spare wealthy decedents from paying up to 90 percent of the estate taxes they would otherwise owe. ``Someone who is worth $30 million net -- that's a lot of money -- they would be paying less taxes than someone who works at a plant in Henderson, Nevada,'' Reid said.