Repeal Of Estate Tax Blocked genre: Polispeak

In a close vote, the Senate failed to pass a bill that would have permanently repealed the estate tax. The 57-41 vote was a setback for Republican Senators and the Bush administration. Bloomberg has the full article here. Democrats have fought the move, arguing that the measure is focused on the wealthiest one percent of the population and that it would create additional revenue deficits.

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vote ends for now the hopes of opponents that the levy, dubbed a ``death tax'' by Republicans, will be permanently repealed.

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.

I recently listened to a discussion that detailed the positions on both sides of the issue. Those in favor of the repeal express concerns that the estate tax has made it prohibitive for a family member to inherit a small business since the estate tax may potentially trigger a large liability. The argument makes some sense to me dependent on the worth of the business and the overall value of the estate. However, the measure defeated by the Senate sought the full repeal of all estate taxes which seemed to be a give away to the extremely wealthy. As so often happens with politics, it is difficult to relate the proposed legislation to real world examples in order to evaluate the fairness and the impact. The following remark from Senator Reid demonstrates this problem.

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.

The proponents offer a completely differing perspective.

"Permanent repeal of the death tax would relieve thousands of families with small businesses, farms, and ranches of its excessive and unfair costs and would mean that many more family businesses could thrive as a source of continuing job creation and economic growth,'' the administration said in a statement.

The other notable consideration is the impact any reduction in tax revenues might have on the current cash deficits. At a time when the country is experiencing record deficits and debt, many feel providing the wealthiest Americans additional tax relief cannot be justified.

The bipartisan congressional Joint Committee on Taxation estimated in 2005 that repealing the estate tax would cost the federal government more than $71.6 billion a year in lost revenue by 2015; the Treasury Department estimates the revenue loss at $65.8 billion that year.

The debate simply points out the degree to which political considerations further complicate the passage of common sense legislation. All too often the complex nature of the language inserted into bills serves to disguise the motivations of the interest groups that represent particular constituencies. The added influence exerted by the need for politicians to raise campaign contributions offers little encouragement to the average voter.

Daniel DiRito | June 8, 2006 | 10:42 AM
AddThis Social Bookmark Button

Post a comment


Trackback Pings

TrackBack URL for this entry


© Copyright 2024

Casting

Read about the Director and Cast

Send us an email

Select a theme:

Critic's Corner

 Subscribe in a reader

Encores

http://DeeperLeft.com

Powered by:
Movable Type 4.2-en

© Copyright 2024

site by Eagle River Partners & Carlson Design