Frist Will Consider Compromise if Repeal of the Estate Tax Fails (only 84%

[papau]

of the estate tax will be repealed!)

http://www.nytimes.com/2006/06/08/business/08tax.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1149779371-ULpoa5S7hKaxVVUdNiYkDw

June 8, 2006
Frist Will Consider Compromise if Repeal of the Estate Tax Fails

By BLOOMBERG NEWS

WASHINGTON, June 7 (Bloomberg News) — The Senate majority leader, Bill Frist of Tennessee, said Wednesday that he was willing to consider alternative proposals if senators did not agree to consider a full repeal of the estate tax.

<snip>Charles E. Grassley, the chairman of the Senate Finance Committee, said Republicans were three or four votes shy of winning full repeal. He said they might be able to muster the votes needed to pass an alternative measure that would exempt $10 million of a couple's estate from the tax. The plan would subject any amount above that to a 15 percent rate, or 31 percentage points lower than the current top rate of 46 percent.

"We're going to start out with the purest form, which would have outright elimination of the estate tax," Mr. Grassley, an Iowa Republican, said. "But I think we're going to come up short of the 60 votes." He said the alternative proposal was modified "to get more votes" by subjecting estates worth more than $30 million to a 30 percent rate.

The Senate vote is the last hurdle for groups that have lobbied for repealing the estate tax for more than a decade. The House voted 272-162 in April 2005 to repeal the tax permanently, and the Bush administration says it wants to abolish the tax. The Senate fell six votes short of permanent repeal in 2002.

[lumberjack_jeff]

1. The "purest form"?

The purest form of aristocracy, of course.

Fucking assholes. I reject the idea that someone inheriting an estate greater than $10 million in size has a bigger moral right to a tax-free existence than a working class person.

[redqueen]

2. What happened to the "party of fiscal responsibility"?

How can they do this while we're so deep in debt?

[Sadie5]

3. Willing to accept alternative proposals?

Who the heck does this idiot think he is. Another entitlement for the rich deal while the poor and middle class get nothing.

[aquart]

4. They promised to rig the machines to make him president?

[regnaD kciN]

6. Some "compromise proposal" is needed...

...but not total repeal or the proposal Frist is floating.

We've been under a "temporary estate tax cut" for some time. Prior to 2001, the estate tax was 50% on everything. That year, legislation was passed making the first $1 million tax-free, and cutting the tax rate on the rest by a small amount. Under the law, that exempt amount has been raised and the rate cut automatically on several occasions as the years went on, so that, now, there's a $2 million exemption and a top tax rate around 48%. In 2009, the exemption will go up to $3.5 million; in 2010, there will be no estate tax at all. However, in 2011, the law will expire and the full amount will be taxed at 50%, just as it was before 2002.

I don't think it's necessarily unfair to amend the law so that there's some degree of exemption; after all, as housing prices have gone up, and absent a crash in housing prices, it's not impossible that a suburban house near a major metropolitian area like New York might be in the million or so range by 2011. And many small, family-run farms have artificially-inflated appraised values based on turning the land into a housing development. IMHO, a parent should be able to leave the family home to their children without forcing them to sell it to pay a 50% estate tax bill.

Frist's proposed "compromise" of a $10 million exemption is ridiculous, but I don't think it's too absurd to keep the rates where they are now, or offer some sort of "homestead exemption" on the property that was the ancestor's primary dwelling. Going back to 2001 rules, as would happen in five years if no further legislation is forthcoming, really would be hitting the middle class as well as, and harder than, the moneyed elite.

[Doremus]

9. Prior to 2001, it wasn't 50% of everything.

In 1992, my folks' estate was below the threshold (I think it was $600K) and we paid no federal inheritance taxes.

Randi was talking about the family farm argument tonight. It's bogus. Didn't catch the particulars, but she said she checked and no one had lost their farm due to inheritance taxes.

Poor, poor Frist had to 'sell a piece of land' to cover their family's $300K inheritance tax bill. Course, what he or the other 18 families who paid to have the Senate dispose of this for them, is that in order to get a tax bill like that the estate has to be worth multiple millions. No, the poor aristocrats aren't selling family homesteads to pony up.

[zreosumgame]

5. have to make sur Paris hilton can slime around

and debase the human race without being bothered with thinking and stuff...

[seasat]

7. The effective tax rate for the dynasty tax is actually pretty low.

The rates are lower than the income tax rates. The CBPP calculates it would be an effective rate of 8.6% to 21.9% for an exemption of 2 million and a 45% rate. (LINK) Sounds pretty fair to me. If they put in place an exemption of about 2 million, kept the rate at its current level, and indexed the exemption to inflation, then farms or small businesses would not be effected. Even under the 2000 law only about 5% of the estates did not have enough liquid assets to cover the tax.

[Mind_your_head]

8. You mean they only have to 'honey-trap' six more senators

and it's a 'done deal?' yeeeeeeeehaw!!! :sarcasm:

[MsMagnificent]

10. Why compromise? They lost.

Period.