- The Washington Times - Friday, June 7, 2002

The House yesterday passed a bill to make last year's 10-year phaseout of the estate tax permanent the first in a series of individual votes on the elements that make up President Bush's $1.35 trillion tax cut.

The bill passed 256-171, with 41 Democrats and one independent joining 214 Republicans in favor of it, and four Republicans joining 166 Democrats and one independent in voting against it.

The measure, which now heads to the Senate, would make permanent the tax cut set to expire in 2010. Unless the new bill becomes law, the tax levied against an estate upon an owner's death would be returned to 2001 levels.

The same is true of other parts of the tax-cut bill passed last year, including the elimination of the marriage penalty, child-adoption tax credits and tax cuts dealing with retirement plans.

"Members face a clear choice today," Majority Whip Tom DeLay, Texas Republican, said during the floor debate. "Will they stand with the taxpayer or will they empower the tax collector? Will they stand with mom-and-pop businesses and American farmers, or will they assist those seeking to confiscate their hard-earned assets? The vast majority of Americans believe that the death tax is the most evil tax on the books."

But Minority Leader Richard A. Gephardt, Missouri Democrat, said there are more pressing issues Congress should be debating.

"I cannot think of a more irresponsible, wrongheaded thing to do on the floor of the House today on the day they're announcing finally and happily a proposal for homeland security that's going to cost money to be out trying to say that in a time of war we need to give a trillion-dollar tax break to the top 3,000 wealthiest people in the country," he said.

The estate-tax repeal passed last year increases the minimum size of an estate subject to the tax from $1 million in 2002 to $3.5 million in 2009, while steadily reducing the tax rates on the highest estates. By 2010, the entire tax will be abolished. But Senate rules require 60 votes to pass a permanent relief bill something supporters couldn't muster so the full tax would be reimposed unless new legislation can be passed.

House Democrats proposed raising the minimum size of estates subject to the tax to $6 million instead of a total repeal. That amendment failed, but is likely to come back in the Senate.

Under a deal struck two months ago, senators will vote before the end of this month on making the repeal permanent but yesterday Sen. Kent Conrad, North Dakota Democrat and chairman of the Budget Committee, said there probably aren't 60 votes for a full repeal.

Democrats said only 2 percent of estates are large enough to be subject to the tax now, and in the later years of the phaseout, less than one-half of 1 percent of all estates would be subject to taxes.

Those families are the "super rich," Democrats say. Mr. Conrad said, for example, former Enron Chief Operating Officer Jeff Skilling would benefit to the tune of $55 million if the estate tax is eliminated.

But House Majority Leader Dick Armey, Texas Republican, painted the picture of a Texas family farm worth $4 million and said that farm would have a yearly income less than $40,000, but have a $1.4 million tax liability when the owner dies.

Rep. Christopher Cox, California Republican, who has been pursuing a repeal for nine years, said those hurt the worst by the tax are employees of a small business that is forced to be sold or closed. "This is a tax borne in real life by the people who are laid off," he said.

Senate Republican Conference Chairman Rick Santorum from Pennsylvania said a vote against the bill amounted to "a pro-suicide vote," suggesting estate owners would be motivated to kill themselves in 2010 in order to avoid paying the reimposed tax the next year.

Republicans see the issue as a no-lose proposal either they get credit for a tax cut, or they have an issue to use against Democratic incumbents in November's elections.

"We're actually more interested in having the public policy, but if we can't pass that, we'll take the issue," said Rep. Thomas M. Davis III, Virginia Republican and chairman of the National Republican Congressional Committee.


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