Kyl Still Pushing for Permanent Estate Tax Repeal

Sen. Jon Kyl (R-AZ) is making a new push to permanently repeal the estate tax in spite of budget deficits and a growing national debt (not to mention its fundamental unfairness).

Under changes enacted in June 2001, the estate tax will be repealed for one year only (2010). In 2011, the estate tax will be restored, at the exemption levels and tax rates in effect in 2001. Kyl introduced a joint resolution Oct. 24 expressing the sense of Congress S.J. Res. 21 that this should not happen -- that the repeal should be extended each year until it is ultimately made permanent. This resolution was placed on the Senate General Calendar on Oct. 27, bypassing consideration by the Finance Committee. Consideration of the resolution is at the discretion of Senate Majority Leader Bill Frist (R-TN) and could occur at any time, possibly within the next few weeks.

On Oct. 21, the Washington Post reported that Kyl, who has always been a vociferous champion for complete and permanent repeal of the estate tax, is also quietly considering another tactical direction -- estate tax "reform." Under this "reform," the estate tax would be reduced to 15 percent -- the current rate on capital gains and dividends -- and apply to only individuals with more than $15 million and couples with more than $30 million.

Currently, the estate tax kicks in at $1 million for individuals and $2 million for couples, with the highest tax rate at 49 percent. Under the provisions of the June 2001 tax cut, the exemption level is scheduled to slowly rise until it reaches $3.5 million for individuals and $7 million for couples in 2009, with the highest tax rate at 45 percent. The huge exemption levels and low tax rate reportedly under consideration by Kyl would virtually eliminate the estate tax.

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