WASHINGTON - A Senate Finance subcommittee held the first hearing of the year Thursday on legislation that would eliminate estate taxes, a banking industry priority.
"People are willing to pay their fair share of taxes, but the government got greedy with the death tax," panel Chairman Charles E. Grassley, R-Iowa, said at the hearing. "The death tax has to go."
Sen. Jon Kyl, R-Ariz., introduced legislation last month that would replace the federal estate tax with a capital gains tax. Instead of levying an estate tax, currently as high as 55%, at death, the bill would impose a 20% capital gains tax when the inherited assets are sold.
Rep. Jennifer Dunn, R-Wash., and Rep. John Tanner, D-Tenn., introduced similar legislation to repeal the tax in the House on Wednesday.
Their bill would cut the 55% maximum inheritance tax by five percentage points immediately and by five more points in each of the next 10 years. It would exempt the first $1.3 million of assets from estate taxes; the current exemption is $675,000.
Similar legislation passed the House and Senate last year, but was vetoed by then-President Clinton. Its prospects are brighter this year, as President Bush has included estate tax repeal in his $1.6 trillion tax cut plan.