WASHINGTON - Encouraged by the presence of an ally in the White House, a bipartisan group of House lawmakers on Wednesday introduced a bill to eliminate estate taxes.
The Death Tax Elimination Act of 2001, sponsored by Reps. Jennifer Dunn, R-Wash., and John Tanner, D-Tenn., would cut the 55% maximum inheritance tax by five percentage points a year for 10 years. The bill would exempt the first $1.3 million of assets from estate taxes; the current exemption is $675,000.
The legislation has 172 co-sponsors, including 24 Democrats.
Congress passed a similar bill last August, but President Clinton vetoed it, and there were not enough votes to override the veto. Prospects for enactment are brighter this year. The government has a big surplus, and President Bush has made tax cuts a major focus of his new administration. Last August, when he accepted his party's nomination, he vowed to abolish the "death tax."
"This is a president who keeps his word, as we are all discovering to our delight," Rep. Dunn said.
The bill is expected to go to a House vote this spring, but Rep. Dunn said that she is uncertain whether it will be included in a broader tax bill or stand on its own.
In the Senate, a broader tax relief bill that includes a repeal of the estate tax is expected.
Repealing the estate tax is a priority for community bankers because it would help them pass bank ownership to heirs and help bank customers pass on their small businesses or farms, said Independent Community Bankers of America executive vice president Kenneth A. Guenther.
Mr. Guenther said he is confident bankers will get some tax relief this year. "There will be a substantial liberalization of the death tax," he said, but he cautioned: "Whether the whole hog is going to clear the Congress over rather strong Democratic opposition remains to be seen."
