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Financial Planning > Tax Planning

Vote Keeps Trifecta Bill Off Senate Floor

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Supporters of deep cuts in the federal estate tax failed today to win enough votes in the Senate to get H.R. 5970 onto the floor.

The motion to “invoke cloture,” or limit debate on the trifecta bill, failed by only 4 votes. The final vote for cloture was 56-42. Supporters of H.R. 5970 needed 60 votes to pass the motion.

Senate Majority Leader William Frist, R-Tenn., a prime architect of H.R. 5970, was one of the senators who voted against cloture.

Insurance industry lobbyists say Frist voted against the motion to reserve the right to bring it back to the floor when Congress resumes work in early September.

H.R. 5970 includes provisions that cut the estate tax, extend many popular federal tax breaks, and raise the federal minimum wage to $7.25 per hour, from $5.15, for most workers at large and midsize employers.

The bill would increase the estate and gift tax exemption amount for all but the very largest estates to $5 million per person by Jan. 1, 2015, and a maximum rate of 30%.

The Association for Advanced Life Underwriting, Falls Church, Va., and the National Association of Insurance and Financial Advisors, Falls Church, Va., have been calling the $5 million exemption too expensive and supporting an alternative estate tax proposal with a $2.5 million exemption and a top rate of 45%.

Frist and other Republicans in Congress based portions of H.R. 5970 on tax provisions drawn from a draft pension system bill prepared by the House-Senate pension conference committee.

The conference committee was unable to produce a conference report, but congressional leaders put much of the rest of the draft bill in H.R. 4.

The House approved H.R. 4 and H.R. 5970 last week.

Immediately after considering the H.R. 5970 cloture motion, the Senate voted to approve H.R. 4 and send it to President Bush.


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