Tuesday, April 11, 2006

Advocacy groups are starting to campaign aggressively with advertisements, polls and other tactics ahead of a Senate vote next month on legislation to repeal the estate tax.

The Free Enterprise Fund (FEF) will begin targeting Arkansas Democratic senators today with a television ad featuring vultures eating carcasses. It warns, “When the vultures circle, it means they’ve come to take their share of your savings. The death tax can rip away 55 percent of what you save for your loved ones.”

Later in the ad, the faces of Sens. Hillary Rodham Clinton of New York, Edward M. Kennedy of Massachusetts and Senate Minority Leader Harry Reid of Nevada are superimposed on the vultures, symbolizing Democrats who want the tax to continue. Similar ads are planned for other states as part of a $3.7 million national campaign leading up to the vote.

Meanwhile, those on the other side of the issue are seeking to reassure senators that most Americans are on their side, and want to keep the tax in some form in light of government deficits and other pressing needs.

The Emergency Campaign for America’s Priorities released a poll yesterday that it said proves that opinions have shifted and more people oppose the tax’s being repealed. The poll of 910 persons, conducted by Penn, Schoen and Berland Associates Inc., found that when asked simply whether the estate tax should be repealed, reformed or left as is, 57 percent favored reform or leaving it alone, and 23 percent backed repealing it.

“The landscape has shifted and continually more Americans don’t want to see the estate tax repealed,” said William Mann of Penn, Schoen and Berland.

The number of people who want to reform the tax or keep it as is jumps higher when people are informed that the tax affects only a small percentage of Americans, he said. “It provides some useful information for legislators as they consider this debate,” Mr. Mann said.

The House last April approved a repeal of the tax, which is imposed on estates valued at more than $2 million for individuals and $4 million for couples, after the owner dies. The maximum tax rate imposed is 46 percent.

Opponents say it’s an unfair tax that sometimes ruins family businesses or farms that people have spent years building.

“It’s just about penalizing success, and that’s why it’s unfair and wrong,” said Phil Kerpen, policy director of FEF. The group notes that the government taxed the savings when it was first earned as income and then taxed the return on the savings, so the death tax amounts to a triple tax.

The current estate-tax levels continue until 2009, when the tax will start at $3.5 million for individuals and $7 million for couples. In 2010, the tax is repealed for one year, but it returns in 2011 at levels of $1 million for individuals and $2 million for couples. The maximum tax rate at that time will be 55 percent.

The House-passed bill and the legislation before the Senate would keep the repeal in place permanently after 2010.

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