Estate Tax Moves to the ?Top Ten? in the Senate

With approval of the FY 2003 spending bills finally accomplished, Senate Republican leaders unveiled their legislative agenda for the 108th Congress on February 15, 2003. Permanent repeal of the estate tax made their list of top-ten legislative items. In January 2003, Sen. Jon Kyl (R-AZ) introduced a bill to accelerate full repeal (currently scheduled for one year in 2010 by the 2001 Bush tax cut) to 2005 and permanently eliminate the estate tax thereafter. Several other bills have since been introduced to make repeal permanent after 2010. While the rationale for eliminating the estate tax is to “save” small family farms and businesses from harm, most of the bills that have been introduced are for complete repeal of the estate tax. However, Sen. Blanche Lincoln (D-AR) also introduced a bill to make qualified family farms and businesses completely exempt from the estate tax. Essentially, this would allow a giant loophole through which even the largest, wealthiest businesses could escape estate tax liability.

None of the bills provide for a reasonable reform that would protect the few actual small family farms and businesses or others who might truly be harmed by the estate tax while preserving our most progressive tax. The estate tax is a valuable source of federal and state revenue, provides an incentive for charitable giving, and is the only way we have to tax appreciated wealth that is passed down through generations. It primarily affects only the top one to two percent of the very wealthiest. Preventing permanent repeal and seeking reasonable reform must be a priority of the progressive community, especially with the daily news of proposed cuts in services because of increasing federal budget deficits and the state fiscal crises, and the continued growth of income and asset inequality in the US.

In addition to permanent repeal of the estate tax, the other high-priority issues identified by Senate Republicans are passage of a Medicare prescription drug benefit, tax cuts for “economic stimulus and growth,” prohibiting “late-term” abortions, increasing local flexibility and federal financing for education initiatives, enacting stricter work requirements for welfare, limiting medical liability for malpractice, increasing funds to fight the global AIDS epidemic, promoting a reliable domestic energy supply, and enacting measures to protect against biological attacks.

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