WASHINGTON -- A bi-partisan compromise on the estate tax debate appears promising in 2008, the Plumbing-Heating-Cooling Contractors – National Association reports.
A year ago the estate tax legislation seemed to be dead, a victim of Congress's inability to deal with the issue. However, on Nov. 13, 2007, Sens. Max Baucus (D-Wyoming), chairman of the Senate Finance Committee, and Jon Kyl (R-Ariz.), ranking member on the committee, resurrected the estate tax debate. This has created talk of a bi-partisan compromise between Baucus and Kyl.
While no specifics have been put forth, the senators would like to move forward to address the quickly approaching problem of the “sunset” of the death tax repeal. If Congress does nothing, the estate tax will disappear in 2010, only to revert back to pre-2001 law in 2011, which carries an original rate of up to 55% tax. Although some lawmakers and activists don't want to see the tax eliminated completely, resurrecting it could prove more politically painful than reaching a compromise before 2010.
PHCC noted that realizes that if industry advocates don't win in their quest for full repeal, small businesses still need some kind of relief and permanency in order to plan for the future. However, any estate tax legislation will face the hurdle of pay-as-you-go rules, which require tax cuts to be offset by spending cuts or revenue increases.