Estate tax repeal falls short in Senate vote

Estate tax repeal falls short in Senate vote

[JURIST] Supporters of repealing the federal estate tax failed Wednesday to get enough votes to begin floor debate on the Death Tax Repeal Permanency Act of 2005 [HR 8 text], which would allow wealthy families to avoid the estate tax, which can be as high as 46%, on the portion of their estate worth more than $2 million at death. Due to an earlier Democratic filibuster on the bill, Republicans needed 60 Senate votes to approve a motion to proceed with floor debate, which they narrowly missed in Thursday's 57-41 vote [roll call]. The same bill was approved by the House [JURIST report] last April. The US Treasury Department estimates that an estate tax repeal would cost the government over $65.8 billon per year in lost revenue.

An alternative to HR 8 [S 7 text], sponsored by Sen. Jon Kyl (R-AZ), would tax the portions of estates that are valued at more than $10 million at rates between 15 and 30 percent. Democratic leaders point to more pressing issues before Congress than repealing a tax estimated to affect only 1% of Americans, while the Bush administration has announced its support for HR 8, saying the bill would provide tax relief for small business owners and farmers. AP has more.