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Thursday, June 6, 2002
House Republicans pushing repeal of the inheritance tax
A story released today by the Associated Press reports that House Republicans leaders scheduled a vote Thursday on a bill that would remove the Jan. 1, 2011, expiration or ``sunset'' date that blocks permanent repeal of the inheritance tax. Under current law, the tax will gradually decrease and then disappear completely for only one year, 2010, before returning in 2011 at higher, pre-2001 levels under current law. That's because last year's $1.35 trillion tax cut was passed under Senate budget rules requiring that the whole thing expire in 2011. The Democratic-led Senate is not expected to approve permanent repeal, which would add nearly $100 billion to the 10-year cost of the tax cut. Most Democrats blame the big tax cut for a return to budget deficits that siphon away dollars from other priorities such as a Medicare prescription drug benefit and education. Senate Majority Leader Tom Daschle, D-S.D., has promised to bring up permanent repeal of the estate tax later this month, but it appears supporters will fall short of the 60 Senate votes needed to pass it. "The outlook from my perspective is pretty good," Daschle told reporters. "I don't think they've got the votes." Under current law, prior to repeal, the estate or "death" tax drops gradually from a 2001 high of 55 percent to 45 percent, while the amount exempted from tax rises from $1 million today to $3.5 million. Even under the old law, the tax affected a relative handful of the wealthiest estates; in 1999, just under 50,000 estates paid roughly $119 billion in estate taxes, according to IRS statistics. Next week, the House is also going to vote on making permanent the provisions gradually ending the tax "marriage penalty" affecting millions of two-income couples. "In the past year and a half, the House has voted 21 times to lower taxes for hardworking Americans," said House Majority Leader Dick Armey, R-Texas. House Democrats were countering with an alternative that would raise exemption levels so that all but the biggest estates would owe no tax, but it was unlikely to pass.
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