Senate Considers Estate Tax Relief Budget Measure

by Mike Godfrey, Tax-News.com, Washington

10 March 2004

Supporters of a permanent cut in estate taxes received a boost this week as the Senate on Monday began examining budget plans that would increase the length of time families and businesses remain exempt from the tax.

Whilst legislation enacted in 2001 will lower estate taxes, cutting them to zero in 2010, the same law will also reinstate the tax at pre-2001 levels in the year 2011. However, the Senate Budget Committee last Thursday voted 12-10 to pass a budget resolution for the years 2005 through 2009 that will cut the tax to zero a year earlier. What is to happen beyond this date however, is unclear.

Whilst many conservatives favour a permanent repeal of the tax, some Republicans are now somewhat ambivalent given the perilous state of the government’s finances. Others meanwhile, think axing the estate tax is just plain unfair.

“Repealing the estate tax would result in multi-million dollar tax cuts to this tiny sliver of Americans,” a coalition of influential business leaders going under the moniker of Responsible Wealth, observed recently.

Ex-Federal Reserve Chairman, and member of the group, Paul Volcker also argues that repealing the law represents “poor social and tax policy”, given the current level of federal debt, and has called the proposal “fiscally irresponsible”.

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