Senate Votes To Accelerate Temporary Repeal Of Estate Tax
The U.S. Senate voted to accelerate the temporary repeal of the estate tax, but not to make the repeal permanent.
However, the process is far from over, industry representatives say.
As part of the debate over the fiscal year 2004 budget, the Senate approved an amendment repealing the estate tax on Jan. 1, 2009, one year earlier than the current repeal date of Jan. 1, 2010.
However, the repeal will still sunset on Jan. 1, 2011, meaning the estate tax will come back into being on that date.
Jack Dolan, a spokesman for the American Council of Life Insurers, Washington, says that in effect, what the Senate did was establish a placeholder in the budget resolution for accelerated repeal of the estate tax.
Dolan says only 51 Senators voted in favor of accelerating the repeal, which is the smallest vote total received by the repeal issue during the course of the current debate.
However, he adds, the issue still must be addressed specifically by the Senate Finance Committee.
But while the budget resolution would accelerate the temporary repeal, Dolan notes, some people on Capitol Hill will not be happy until the estate tax is repealed in its entirety.
ACLI, Dolan says, supports reform of the estate tax and will continue to monitor the estate tax issue in Congress, adding that in the discussions, life insurers must be at the table.
Albert J. “Bud” Schiff, president of the Association for Advanced Life Underwriting, Falls Church, Va., and president of Stamford, Conn.-based NYLEX Benefits, says AALU takes great solace in the fact that repeal legislation garnered 58 votes in the Senate last year and only 51 this year.
More and more people, he says, are starting to realize that anything done on the estate tax should be permanent and sustainable, and total repeal of the estate tax is not sustainable.
It is important, Schiff says, that people be able to rely on the law when they engage in long-term planning.
He says, however, he expects to see other efforts to permanently repeal the estate tax. Indeed, he says, there will likely be several votes in the House, which may pass three or four different versions of permanent repeal.
However, Schiff says, even though the accelerated repeal of the estate tax passed in the Senate with 51 votes, under the Senates parliamentary rules permanent repeal will require 60 votes.
He says this will be difficult to achieve due to the current budgetary climate and the uncertainty surrounding the war with Iraq.
AALU, Schiff adds, continues to support estate tax reform, and senses there is growing support for sensible reform that is immediate and sustainable.