Industry Told It Needs To Make
Better Case For Estate Tax Reform
The life insurance industry needs to make a more effective case in favor of reform, as opposed to repeal, of the estate tax, a top political consultant says.
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The industry and other advocates of reform must take their case to the public in a way that makes supporting reform a political asset for candidates rather than a disadvantage, says Steve Ricchetti, president of Ricchetti Inc.
Ricchetti, who spoke during a tax panel discussion at the annual meeting of the Association for Advanced Life Underwriting last month, recently was retained by AALU to help in the estate tax reform campaign.
The supporters of repeal, he says, developed “a well-organized, effective political campaign to convince people that a broader set of interests are attached to repeal than actually exists.”
John J. Kelliher, vice president of Timmons & Co., and a counsel to the American Council of Life Insurers, says there does appear to be a growing thought in the House of Representatives that the repeal movement has run its course politically.
This is due not only to the budget situation, he says, but to the fact that constituents do not like the uncertainty contained in the present law.
But it is difficult, Kelliher says, for members of Congress who strongly supported repeal to come off that position radically and instead support reform.
While it is possible for reform to be enacted this year, he says, the issue may be more ripe in the next Congress, particularly as the year 2010, when the legislation sunsets, approaches.
Although estate tax reform was identified as AALUs top legislative priority, Gerald H. Sherman, an attorney with Silverstein & Mullens and AALUs longtime counsel, says an issue emerging in several states could raise serious difficulties for the life insurance industry.
This involves an effort to alter state insurable interest laws in ways that allow investments in life insurance by those who appear to have no relationship to an insured, he says.