Permanent repeal of the federal estate failed to get the necessary 60 votes in the U.S. Senate on June 8.
The vote was 57 – 41 to end debate and consider the proposal. It went mainly along party lines. Repeal of the tax has been a long-sought goal of the Bush administration as well as small business groups.
Somelawmakers are reportedly still working behind the scenes to come with a compromise that would protect most small business owners, say reports. However, another vote on repeal of the tax is unlikely this year, says Washington insiders.
The House of Representatives has previously voted overwhelmingly for permanent repeal the estate tax.
Under the tax cut legislation originally passed in 2001, the estate tax is decreasing and will be phased out by 2010. However, it is due to return at its pre-2001 rate (up to 55 percent) on estates of $1 million or more. Currently, individuals worth $2 million or less and couple worth less than $4 million are exempt. Those above that are taxed at 46 percent.
The National Retail Federation, the world largest retail trade association representing 1.4 million businesses and one in five American workers, expressed disappointment over the Senate’s vote.
“While we respect senators’ differences of opinion, it is extremely frustrating that the Senate has voted to not even debate an issue as important as the estate tax,” said NRF Senior Vice President for Government Relations Steve Pfister.
“The Senate is in a state of gridlock where partisanship is repeatedly being placed ahead of public policy. This is the second time in less than a month where an issue vitally important to small business has been set aside because the Senate could not even agree to debate the merits of the issue. If estate tax repeal or Small Business Health Plans are voted down on their merits, then that is the will of the Senate. But votes against even considering these proposals are not votes in the public interest.”