Senate Postpones Estate Tax Vote Until September

by Mike Godfrey, Tax-News.com, Washington

29 July 2005

Senate Majority Leader Bill Frist (R-Tenn) has announced that a vote on the repeal of the estate tax has been postponed until after Congress returns from its summer recess in September.

“Before the Senate adjourns for the August recess, I will file cloture on the motion to proceed to H.R. 8, The Death Tax Repeal Permanency Act of 2005. I expect the vote on cloture to occur when we return in September," Frist announced on Wednesday.

Frist's decision will give extra time to Sen. John Kyl (R - Arizona) and the ranking Democrat on the Finance Committee, Sen. Max Baucus (D - Montana) to negotiate a compromise acceptable to both parties. Earlier in the month, it emerged that agreement had been reached on the "basic parameters" of an estate tax compromise entailing a lowering of the tax rate in combination with an increase in the estate tax threshold.

"As many of my colleagues know, this bill passed the House of Representatives in April by an overwhelming vote of 272-162. I hope this bill will find a similar level of support here in the Senate," Frist stated.

Currently, the estate tax threshold is $1.5 million, which is set to rise to $3.5 million (and $7 million for couples) in 2009 under tax cuts passed in 2001. Meanwhile, rates are set to decline to 45% in 2009 before being repealed for one year. However, under the 2001 legislation, the tax will then be resurrected at the pre-2001 rate of 55%.

“The death tax is a vicious tax imposed on America’s small businesses and families during a time of grieving and pain," added Frist.

"It forces families to give up things their loved ones worked an entire lifetime to build. Eliminating this tax is a matter of principle. We must care for America’s hardworking families by enabling them to retain their family’s assets without paying a price," he argued.

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