'April Surprise' Turns Into July Fright As States Begin New Budget Year

Last Monday, July 1, marked the start of a new fiscal year for most states, many of which had to resolve large deficits after years of "April Surprises" -- the affectionate name given to the larger-than-expected influx of state income tax revenue each April 15.

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Bumping Our Heads Against the Debt Ceiling

On June 28, the day Congress is planning to leave for the July 4 recess, Treasury Secretary Paul O’Neill has warned that the government will run out of money to pay its bills unless Congress increases the limit on how much the Treasury can borrow. This means parts of government, if not all of it, will no longer properly function, and government will default on its bills. This has been publicly described as a showdown between the Bush administration and Congress, but in fact it is really a showdown between Bush and the Republicans in the House.

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A Resounding "No" to Estate Tax Repeal

On June 12, the Senate rejected a proposal by Sen. Phil Gramm (R-TX) to make repeal of the estate tax, which under current law only expires for only one year, in 2010, permanent. Repeal advocates needed 60 votes to send the House-passed estate tax repeal bill on to the President for his signature, but only received 54 votes -- 44 Senators, including 2 Republicans, voted against repeal. This is even fewer votes than repeal proponents received in February on a non-binding .

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Budget Process, October 1, And Tax Cuts

With the expiration of key Senate budget rules on October 1, tax cuts will get easier to pass.

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RESOUNDING "NO" FOR PERMANENT REPEAL OF THE ESTATE TAX

The final vote this evening (June 12) on the Gramm amendment for permanent estate tax repeal was 54 for permanent repeal and 44 against -- clearly failing the 60-vote requirement. This represents a resounding victory against permanent repeal of the estate tax. Votes on the two Democratic reform amendments showed that there is a lot of support for reform, and means that we now need to move forward to talk about what a fair and reasonable reform would be. (The Dorgan amendment was 44 for and 54 against; Conrad amendment was 38 for and 60 against) (To be precise, these all were procedurally votes on waiving the budget rules to allow votes on the amendments--but effectively they were votes on the substance of the amendments.) Please check www.fairestatetax.org for updates this week.

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Estate Tax Briefings

A successful nonprofit briefing on the estate tax was held on June 6. A press briefing to release the results of a nationwide poll by Greenberg Quinlan Rosner Research will be held Wednesday, June 12.

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House Passes Permanent Repeal of the Estate Tax (Again)

The House wanted its vote on Thurs. June 6th on permanent repeal of the estate tax (H.R. 2143) to send a signal to the Senate showing widening support for repeal. The vote did send a signal, though not the one the House had intended.

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Estate Tax Repeal Advocates Up the Stakes in Estate Tax Debate

In an effort to re-emphasize their dogged commitment to tax breaks for the very wealthy, House Republicans announced last week that they would bring up the issue of permanent estate tax repeal for a vote shortly after they return from their Memorial Day recess - on June 5 or 6.

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Stop Permanent Repeal of the Estate Tax

This alert provides background information on the estate tax and 5 action steps you can take to help prevent repeal of the estate tax. Read through the alert and then contact your Senators through this legislative link -- the talking points included in this alert are also available there to provide suggestions for your letter or call to your Senators.

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We Cannot Make Estate Tax Repeal Permanent

Estate tax repeal proponents, unwilling to postpone their agenda to eliminate the country’s most progressive tax, even in the face of an ever-increasing number of costly national priorities and an estimated $100 billion deficit for this fiscal year (see related story, this issue), have continued to push for permanent repeal at every opportunity.

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