The Senate hopes to decide Thursday whether to debate a bill that would repeal the estate tax.
Major insurance industry trade groups have been supporting more modest reform, which would exempt around $2.5 million in assets from the estate tax.
The Republican Senate leadership reluctantly decided to embrace reform in principle late Wednesday, but at a higher level than the insurance industry is comfortable with–exempting about $10 million in assets.
David Stertzer, chief executive of the Association for Advanced Life Underwriting, Falls Church, Va., said today that the AALU expects a vote on a motion to proceed, which would start consideration of the estate tax repeal bill, H.R. 8.
The Senate set the vote for 10:30 a.m. Thursday.
“Right now, it looks close, and the situation is very fluid, but there may not be the 60 votes needed to consider repeal,” Stertzer said.
If H.R. 8 supporters are not able to round up enough support for repeal, Senate Republican leaders may be willing to consider a vote on an estate tax reform proposal.
Eric Ueland, chief of staff to Senate Majority Leader William Frist, R-Tenn., has said that creating a “sensible” exclusion and a rate that is “significantly less” than 55% would be “a big step forward in putting some fairness back into the tax code,” according to an article posted on the Wall Street Journal Online.
Sen. Jon Kyl, R-Ariz., has been working with Sen. Max Baucus, D-Mont., the most senior Democrat on the Senate Finance Committee, to try to negotiate a reform compromise, Stertzer said.
“We understand that a proposal put forward by Senator Kyl — featuring a $5 million individual exemption and a top rate of 15% for estates under $30 million — would be tantamount to repeal from a fiscal standpoint,” Stertzer reported. “Given the long-term fiscal implications of repeal and other costly national priorities, AALU does not believe repeal or expensive reform alternatives would be sustainable over the long term. AALU continues to advocate for fiscally responsible estate tax reform that exempts the vast majority of Americans from estate tax liability while allowing the remaining few subject to the tax to plan with certainty.”