Frist Keen To Advance Estate Tax Compromise

by Mike Godfrey, Tax-News.com, Washington

20 June 2006

Senate Majority Leader Bill Frist (R - Tenn) has revealed that he wants to have a permanent compromise deal involving the future parameters of the estate tax finalised this week so that it can be voted on by July 4.

Frist, along with other Republicans, had initially supported a full repeal of the estate tax. However, the Senate threw out a motion earlier this month which prevented consideration of a full repeal of the tax.

In a bid to push some kind of estate tax relief through Congress, Frist has signalled his support for a compromise plan drawn up by Sen. John Kyl (R - Ariz) which proposes to raise the estate tax exemption to $5 million from $2 million, or to $10 million for couples from $4 million. Estates between $5 million and $30 million would then pay capital gains tax rates (15%), while estates greater than $30 million would be taxed at 30%.

Frist also urged the House to draw up new proposals capable of securing at least 60 votes in the Senate.

“I will ask the speaker and the House to send a bill to us that would be a permanent solution to the death tax,” Frist stated.

“I will encourage them to attach appropriate provisions to make it attractive, and will hold a vote by July 4th," he added.

Currently, estates of more than $2 million for singles and $4 million for couples are taxed at a maximum 46% rate. Under tax legislation passed in 2001, the exemption level will rise to $3.5 million (and $7 million for couples) in 2009, while rates are set to decline to 45% in 2009 before being repealed for one year. However, the tax will then be resurrected at the pre-2001 rate of 55%.

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