Move To Permanently Repeal The Estate Tax Collapses
An attempt to permanently repeal the estate tax, which was supported by President Bush, collapsed almost the moment it got started.
In his fiscal year 2003 budget, Bush proposed permanently extending estate tax repeal because of the impact the current law has had on estate planning.
Under the current law–the Economic Growth and Tax Relief Reconciliation Act of 2001–the estate tax will phase out on Jan. 1, 2010.
However, due to a sunset provision in the 2001 act, the estate tax will come back into being, exactly as it existed prior to enactment of the 2001 act, on Jan. 1, 2011.
Sen. Jon Kyl, R-Ariz., attempted to place language calling for permanent estate tax repeal in an economic stimulus package that was pending in the Senate.
However, the effort died when Senate Majority Leader Tom Daschle, D-S.D., effectively killed the package.
Maria Berthoud, senior vice president of federal affairs for the Independent Insurance Agents of America, which supports permanent repeal, says IIAA appreciates Kyls attempt.
One life insurance industry source, who asked not to be identified, says the Kyl repeal effort failed because it cost too much.
He says that if Congress was unable to permanently repeal the estate tax last year, when the nation was experiencing a budget surplus, it will not be able to do so now that the budget is in deficit and the country still is in a recession.
In other news, industry representatives are praising Bush for several proposals aimed at enhancing retirement security, but are also urging caution over doing anything that could discourage employers from offering 401(k) plans.
Specifically, Bush again calls for providing an above-the-line deduction (meaning it is available to all taxpayers, whether or not they itemize) for the purchase of long term care insurance.
In addition, the president expresses strong support in his budget for H.R. 2269, the Retirement Security Advice Act, which would allow insurance companies and agents that provide certain services to employer sponsored pension plans to also provide investment advice to employees, subject to strict disclosure rules.
“We are seeing positive movement on these retirement security issues,” says Jack Dolan, a spokesman for the American Council of Life Insurers, Washington.
David Winston, vice president of government affairs for the National Association of Insurance and Financial Advisors, praises the Bush administrations support for H.R. 2269.