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LEGISLATIVE UPDATE Last year, the House and Senate passed HR 8, the Death Tax Elimination Act. It moved through Congress with broad bipartisan support, only to be vetoed by President Clinton. An attempt to override the veto failed by a narrow margin of nine votes. This year with much closer margins in Congress, and a President in the White House who says he will sign a bill to eliminate the death tax, the effort to repeal this devastating tax is alive and well. But success this year depends on the willingness of all those who support repeal to communicate with their Members of Congress. In the House, H.R. 8, the Dunn-Tanner bill, has been re-introduced. This bill phases out the death tax over 10 years beginning in 2001 and also increases the unified credit immediately to $1.3 million. The House of Representatives is likely to act on the death tax in April, possibly before the Easter recess begins. Calls to your U.S. Representative asking for their vote to eliminate this punitive tax should be made immediately. In the Senate, the Kyl-Breaux bill (S.275) has been reintroduced. This bill is considered to be a compromise approach, but is a far more effective approach than any of the other compromises offered up by those who oppose full repeal of the death tax. Last year this bill earned substantial bipartisan support. The Kyl-Breaux bill eliminates the death tax immediately, rather than phasing it out. However, it also eliminates the stepped up basis in capital gains for unrealized capital gains in excess of $2.8 million. Under this plan, there would be no tax payable at death, but if the heirs were to sell the asset after the death, a substantially higher capital gains tax would be payable. If the asset (business) is not sold, no tax is payable. The Senate is likely to take up tax legislation in May. Calls, letters and e-mails to Senators, particularly Democratic Senators, urging them to co-sponsor S. 275 are critical. Because of the very narrow margin in the Senate, gaining the support of Democratic Senators for S.275 is of great importance. For people who care about eliminating this counterproductive tax on capital, now is the time to tell your representatives in Congress to bury the death tax for good. |
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