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Repubs and inheiritance tax
Repubs and inheiritance tax
The conservative repubs are split whether to poster or compromise on inheiritance taxes. Lifting the limit for no tax to 3.5 or 5 Million would exempt 98% of Americans and still not cost as much to the Treasury. That approach is sensible, so not followed by the Repub leadership. So many americans think rich even if they are poor. Another example of the fantasy overwhelming the reality. Why I tell ladies to close their eyes and pretend I am George Clooney!
I can close my eyes and pretend they are Angelina Jolie or Jessica Simpson...
Estate Tax Showdown Is Splitting the G.O.P.
By EDMUND L. ANDREWS
WASHINGTON, June 6 – Senate Republicans, pushing once again to abolish the estate tax on inherited wealth, are split about whether to push for a full repeal that would probably fail, or seek a more cautious compromise with Democrats that could pass.
Permanently repealing the estate tax, or what Republicans have branded the "death tax," is a priority for President Bush and many Republican lawmakers.
But Senate leaders, vowing to schedule a vote for full repeal on Thursday, have yet to line up the 60 votes they need to prevent a Democratic filibuster. Indeed, with public approval ratings declining for Mr. Bush and the Republicans, party leaders face at least as much opposition from Democrats today as they did last summer.
In what is either a shrewd game of chicken or an effort to inflame the passions of crucial Republican constituencies, the Senate majority leader, Bill Frist of Tennessee, has made little effort to strike a compromise with conservative Democrats that would greatly reduce but not fully abolish the tax.
"Senator Frist is for full repeal, first and foremost," a spokeswoman for Mr. Frist, Carolyn Weyforth, said. "Until we've had the cloture vote, any talk of a compromise is premature."
The strategy has divided Republicans. Senator Charles E. Grassley of Iowa, chairman of the Senate Finance Committee, told reporters on Monday that the Senate could easily pass a bill that eliminated the estate tax for all but a tiny slice of the nation's richest families.
Senator Jon Kyl, Republican of Arizona, has been trying for more than a year to woo Democrats from conservative states.
On Tuesday, Mr. Kyl circulated a proposal that would eliminate the tax for any estate worth less than $5 million and reduce the current rate for bigger estates.
Proponents said that repeal of the tax would promote savings and investment and eventually create jobs, as Americans would have more incentive to build businesses if they could keep the wealth within their families.
Critics say the estate tax as it is now reduces some of the nation's economic inequality, and they insist that its repeal would benefit the very wealthiest families at a time when the government is running large budget deficits.
Most polls show that a slim majority of voters support a repeal of the tax, especially when it is called the "death tax." But the tax affects less than 2 percent of all estates – most of which belong to very rich families – and repeal would be expensive.
Full repeal would cost more than $600 billion over 10 years, according to the Congressional Joint Committee on Taxation, although supporters insist the actual cost would be much lower.
The full cost would start to hit the Treasury in 2011 – the same year that the nation's oldest baby boomers will turn 65 and start a sharp rise in spending on Social Security and Medicare.
But opponents of the estate tax, including hundreds of thousands of small-business owners and a well-financed national network of grass-roots advocates, are running television ads in states with Democratic senators like Montana, Louisiana and North Dakota. They have also been campaigning in Maine, whose two moderate Republican senators are reluctant to support full repeal.
The issue could be crucial to the political career of Mr. Frist, who is weighing the possibility of running for president in 2008. He vowed to force a vote last summer, but retreated after it became clear that he could not prevent a filibuster.
Mr. Frist now appears to be going for broke: instead of seeking a compromise that might win over a handful of crucial Democrats, he is pushing for a permanent repeal of the estate tax.
Though Republican aides say Mr. Frist has not closed off the possibility of a compromise, the senator has pointedly refused to schedule any floor time for debate about alternatives in the event that his own effort fails.
As part of Mr. Bush's tax cut of 2001, the estate tax is scheduled to gradually phase out and disappear altogether in 2010 but then return in full the very next year.
Mr. Bush has long called for making his tax cuts permanent, but the estate tax has generated an emotional intensity far greater than most other issues.
"The president's position has been clear, and it is that we should eliminate it altogether," said Edward P. Lazear, chairman of the White House Council of Economic Advisers, in an interview on Tuesday.
"Keeping tax rates down on estates is just another way of not impeding the incentives to save and invest," Mr. Lazear said. "We're already consuming at very high rates, and our savings rate is very low. We don't want to bias the system any more than we already are."
Business groups are pushing hard to make the repeal permanent, focusing on a handful of Democratic senators from states that lean Republican.
The targets are the two Democrats from Arkansas, Senator Blanche L. Lincoln and Senator Mark L. Pryor, as well as Senator Mary L. Landrieu of Louisiana and Senator Max Baucus of Montana.
Mr. Baucus, the senior Democrat on the Senate Finance Committee, has offered his own proposal for scaling back the inheritance tax. Under one proposal he circulated – which was rejected by Republicans as too modest – estates worth less than $3.5 million would be exempt from any tax.
Mr. Baucus has been quiet in recent days, but aides said he was still open to proposals for a compromise that he could sell to other Democrats.
A handful of moderate Republican senators are likely to oppose a full and perhaps even a partial repeal of the estate tax. They include John McCain of Arizona, George V. Voinovich of Ohio, Lincoln Chafee of Rhode Island and the two senators from Maine, Olympia Snowe and Susan M. Collins.
Ardent opponents of the estate tax, who have campaigned for more than a decade on the issue, say their time is hand.
"We're going for full repeal and we're pushing hard," said Dick Patten, executive director of the American Family Business Institute. "I'm very optimistic."
Mr. Patten's group, which claims 1,900 members who own family companies, is spending more than $1 million on television ads in 11 states. Some ads try to strike a bipartisan feel, quoting Republicans, Democrats and the economist Milton Friedman on how the estate tax hurts family-owned companies.
Another ad aims to pressure Mr. McCain, who voted against a permanent repeal of the estate tax in 2001.
"American family business owners and farmers are counting on John McCain, counting on him to keep his promise," said one television commercial that was broadcast in Arizona.
Aides to Senator Snowe of Maine said they had been under heavy pressure from both sides. On Tuesday, even as Mr. Patten's group was still running ads in favor of repeal, a group called the Maine People's Alliance brought a giant replica of a silver spoon and staged a news conference opposing repeal just outside her Senate office.