BNA (subscription required) is reporting that Sen. Mary Landrieu (D-LA) has introduced an estate tax reform bill.

Although not a full repeal and not as costly as Sen. Jon Kyl’s (R-AZ) compromise, it would still cost $245 billion over ten years. Sen. Landrieu’s bill calls for a $5 million per-spouse exemption with a rate of 35 percent that would increase for estates worth more than $10 million.

Prompted by a request from Senate Majority Leader Bill Frist (R-TN), the House passed a version of estate tax reform similar to Kyl’s last week. However, Frist has failed to assemble the 60 votes needed to end debate, and so estate tax is stalled in the Senate.

And Landrieu’s bill, if passed, might torpedo the whole estate tax repeal endevor as the conference report may not pass the House. When the House began debating Rep. Bill Thomas’ (D-CA) estate tax reform bill, he was ardent in his resistance to compromise: "This is not a first offer. It is the only offer to the majority leader's request the chairman intends to offer."

Floyd Norris writes an excellent Op-Ed in today’s New York Times. His piece is one of the better introduction’s to the most recent incarnation of estate tax repeal. He walks us through some of the more technical aspects of the bill and how they will impact charitable giving. Norris also explains how some provisions might actually increase estate tax liabilities for some individuals living in states with estate tax, prompting those states to lower their taxes to avoid an exodus of wealth.

Charities now get billions of dollars in bequests from estates each year. How much of that money flows from generosity, and how much from a desire to reduce taxes, is impossible to know. But in 2004, 47 percent of estates of more than $10 million that were required to pay taxes had at least some charitable contributions, in contrast to just 22 percent of such estates that escaped taxation.

With higher exemptions, it seems likely that the level of donations from estates could fall sharply. For those with no estate tax liability, tax advisers would be likely to recommend that any giving be done before death, when there would be a deduction that could reduce income taxes.

Read the whole thing for good explanation of the ins and outs of the estate tax "compromise".

New York Times: Estate Tax Bill Could Hurt Charities

BNA confirms an earlier rumor that Senate Majority Leader Bill Frist (R-TN) won’t bring estate tax repeal reduction to a floor vote. The Republican leadership in the Senate couldn’t garner enough votes to end debate on decimating the estate tax - Frist needs 60 votes to bring a vote to the floor.

Referring to his intention to raise the issue again Frist said in a statement, "the Senate will vote on a permanent reduction to this tax--a tax that destroys small businesses and family farms."

Oh, if only we could have a debate on the merits of the estate tax and not resort to rhetorical overstatements and half-truths the likes of which Frist throws around in lieu of reality-based arguments. The fact is the estate tax affects a very, very small number of family farms.

But don’t take my word for it, the American Farm Bureau Federation, which lobbies mightily for estate tax repeal can’t name a single family farm that had to be sold to be pay estate taxes.

David Cay Johnston reporting in the New York Times on April 8, 2001 (sorry, no link):

But in fact the Riekenas [family farm owners] will owe nothing in estate taxes. Almost no working farmers do, according to data from an Internal Revenue Service analysis of 1999 returns that has not yet been published.

Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said he had searched far and wide but had never found a case in which a farm was lost because of estate taxes. "It's a myth," Mr. Harl said.

Even one of the leading advocates for repeal of estate taxes, the American Farm Bureau Federation, said it could not cite a single example of a farm lost because of estate taxes.

FactCheck.org:

Of the 440 taxable family farm and business estates in 2004, two out of five paid an average rate of only 1.6 percent Heirs who agree to keep the farm or business assets within the family for 10 years after death can reduce the taxable amount of the estate by 40 percent to 70 percent. And if the farm or business is at least 35 percent of the gross value of the estate, payments can be spread out over 14 years.

The Center on Budget and Policy Priorities on a CBO report on the estate tax:

The CBO report found that if the current exemption level of $2.0 million had been in place in 2000, only 123 farm estates and only 135 family-owned businesses nationwide would have owed any estate tax. The number of taxable farm estates drops to 65 nationwide at a $3.5 million exemption level, the level that takes effect in 2009. The number of taxable family-owned business estates falls to just 94 under the $3.5 million exemption.

[...]

The CBO report also found that of the few farm estates that would owe any estate tax, the vast majority would have sufficient liquid assets (such as bank accounts, stocks, bonds, and insurance) in the estate to pay the tax without having to touch the farm. For instance, at a $2 million exemption level, only 15 farm estates in the entire nation would have owed estate taxes in 2000 that exceeded the liquid assets in the estate; at a $3.5 million exemption, only 13 farms would have faced such a constraint.

And a big thanks to all of you who took action and let your sentators know what you think about estate tax repeal!

We got word that the estate tax vote that may have been taking place in the Senate this week has been postponed and will not be taking place this week (or next week since they will be out for recess). This is good news. The longer they linger on holding this vote, the less of a chance it has of actually happening. The vote is not taking place this week likely because Majority Leader Frist (R-TN) knows he does not have the votes to overcome the necessary procedural hurdles.

Additionally, click here for a new letter signed by twenty-three members of the Leadership Council of Aging Organizations opposing the House version of estate tax "reform."

ThinkProgress points us to a New York Times article in which Warren Buffett states his opposition to estate tax repeal:

Mr. Buffett said repealing the estate tax "would be a terrible mistake," the equivalent of "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics."...

"We have come closer to a true meritocracy than anywhere else around the world," he said. "You have mobility so people with talents can be put to the best use. Without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit." [NYT, 2/14/01]

Last week, the House approved Rep. Bill Thomas’ (R-CA) estate tax repeal reduction bill. This week, the Senate will take up the issue when it begins debate on estate tax near-repeal.

Senate majority leader Bill Frist (R-TN) is expected to ask for a vote to end debate to bring the Senate’s version of the house bill to a full floor vote. To garner the 60 votes needed to end debate Frist will have to convince three Democrats to vote for cloture.

Because of your e-mails two weeks ago, the Senate was persuaded to refuse to kill the estate tax. We’ll do it again this week!

Take Action!

E-mail your Senator today and tell him or her to oppose any action that will jeopardize the estate tax.

Not surprising, but what is interesting is that the vote tally reveals that the House equates the Thomas compromise to full repeal. The House voted to pass legislation that significantly reduces the Estate Tax. The bill, introduced by Rep. Bill Thomas (R-CA) at the behest of Senate Majority Leader Bill Frist (R-TN), would amount to a 75% repeal of the Estate Tax. But, mirroring last year’s vote on full repeal, Thomas’ bill has proven to be no more popular than full repeal.

House Republicans are moving quickly on a proposal to roll back the estate tax so much that it almost amounts to a repeal. House Ways and Means Committee Chairman Rep. Bill Thomas (R-CA) introduced a bill Wednesday that more or less matches the bill proposed by Sen. John Kyl (R-AZ). A floor vote is expected for Thursday.

The Center on Budget and Policy Priorities estimates that the Thomas bill would cost the Treasury $602 billion between 2012-2021, or 75 percent of a full repeal. You can find more details on how the Thomas bill would change the estate tax in this Washington Post article.

Sen. Blanche Lincoln was called out in the LA Times on Sunday by The New Republic Senior Editor Jonathan Chait for what he called Lincoln's "incoherent vision of government." Chait points out the irony of Lincoln's actions on June 8 when she went to the Senate floor to speak passionately for repeal of the estate tax to protect mythical small farms and businesses while in the very same day delivering an irate speech about the need for more government investment in anti-hunger programs.

I think Chait's really hit the nail on the head with his column. Where does Sen. Lincoln think the money currently invested in anti-hunger initiatives comes from? (Note to Sen. Lincoln - it comes from the estate tax.). And she wants to get rid of that money, and then complain that the Senate is not spending more on anti-hunger programs in the very same day?

Lincoln, and all Democrats and Republicans who want to repeal the estate tax while at the same time increasing funding for other areas of government - whatever areas they may choose - need to explain who will pay for all of this after the estate tax is repealed. It certainly won't be the richest of the rich - those most able to afford it - if Sen. Lincoln has her way.

LA Times: The Lie of the Anti-Estate Tax Democrat

Senate Majority Leader Bill Frist (R-TN) outlined his schedule for the next two weeks today, and his plans include bringing up the estate tax again. Frist told reporters, "I'll do everything I can to have another vote on the 'death tax' by July Fourth;" who knows if he will seriously be able to get away with doing this, or if he is only stating his desire to bring up the issue again to pander to his base. Frist acknowledged that he does not have the necessary support in the Senate for full repeal, and so he will probably turn to Sen. Kyl's compromise. This compromise, according to estimates from the Joint Committee on Taxation, would cost upwards of 80 percent of full repeal.

In this excellent article in today's Washington Post, columnist Allan Sloan explains why having an estate tax in place (he uses the 2009 levels as an example) would actually be more beneficial to most wealthy people than repealing the estate tax. He explains this issue in terms of having a stepped-up basis vs. a carry-over basis in place (the article explains it all very clearly).

Sloan, who is taking his information from the nonpartisan Joint Committee on Taxation, explains that wealthy people (the 63,900 who will leave estates between $1.3 million to $3.5 million in 2009) will owe more taxes on assets in 2010 than they will in 2009 because of the way the estate tax law is set up. In fact, it turns out it is actually more financially lucrative for them to have the 2009 estate tax law in place than it would be for them to have full repeal in place, or as it is currently scheduled to be in 2010. He concludes that these 60,000 plus families, many of whom we can assume support estate tax repeal, should be in favor of keeping the estate tax with a stepped-up basis because it is actually more profitable for them. Not to mention it generates significant revenue. He says:

What we shouldn't do is benefit a handful of very rich people by eliminating the estate tax 2010-style at the expense of the small rich and everyone else. We've already made a major mistake by allowing the alternative minimum tax, originally designed to make sure that tax-dodging rich people paid at least something to the IRS, to hit the middle and upper-middle classes but not the truly wealthy. Let's try not to make that same mistake with the estate tax.

Washington Post: Estate Tax Repeal Would Hurt the 'Small Rich'

About a month ago there was an op-ed in The Hill by Women Impacting Public Policy president Barbara Kasoff that spun estate tax repeal as being positive for women and minority business owners. Not only was the article chalk full of misleading statements, but it was written by the president of a group whose members have a special financially lucrative interest in seeing the estate tax repealed (for more information see our previous blog posting on the article.

To follow up on Kasoff's article, The Hill ran an excellent letter in response (scroll down, it is the second item). In the letter, Mark Sorensen exposes Kasoff for producing "a solid work of fiction," pointing out that "the female Louisiana business owner whom Kasoff holds up as a poster child for repeal has a lot more to worry about right now than the estate tax. Only 0.03 percent of estates are even eligible for the tax."

OMB Watch released the following statement on the vote to table the estate tax repeal debate:

The Senate's vote today to stop debate on legislation to repeal the estate tax could very well be a turning point in the battle to save the tax. OMB Watch applauds senators from both parties who voted in opposition to the measure and saved the American people $1 trillion in the process. The estate tax isn't just about federal revenue; it's also a moral issue - about what kind of society we want to be. Therefore, we are encouraged that the notion of shared sacrifice during a time of fiscal crisis and war has finally reached Congress.

This is an important victory in a fight that is far from over. Opponents of the estate tax will now likely turn to "reform" legislation that would be nearly as costly as repeal in order to find a back door through which to sneak in repeal of the tax. We hope all Senators will stand up for America's values and priorities and refuse unfair and unreasonable compromise proposals.

The Senate just completed a procedural vote on repeal of the estate tax, and the motion was not agreed to. The Republican leadership would have needed 60 votes in order to proceed with consideration of full repeal of the estate tax; the final vote count was 57-41.

Sens. Max Baucus (D-MT), Blanche Lincoln (D-AR), Ben Nelson (D-NE), and Bill Nelson (D-NE) were the only Democrats to vote in favor of cloture, while Lincoln Chafee (R-RI) and George Voinovich (R-OH) voted with a majority of Democrats against cloture. A number of Senators on the fence ended up voting against the motion to proceed, including Sens. Maria Cantwell (D-WA), Patty Murray (D-WA), Mary Landrieu (D-LA), and Mark Pryor (D-AR). Two Senators were not present, Rockefeller (D-WV) and Schumer (D-NY). Rockefeller is still recovering from back surgery, and it is not immediately known why Schumer was not present.

Your calls and emails, as well as extensive media coverage around how irresponsible estate tax repeal would be contributed to this victory. More information on the immediate next steps regarding the estate tax will be coming soon.

Washington Post: Senate Rejects Effort to Cut Estate Tax

The Senate is expected to vote on a motion to proceed to H.R. 8 - full repeal of the estate tax. The vote will likely be very close with Republicans needing 60 votes to begin debate on full repeal.

If the vote passes, the Senate will likely reject a full repeal, but may pass a awful so-called compromise that pretty much just as bad as full repeal.

For details on the probable breakout of the vote, see my post from yesterday over at TPM Cafe.

Senate vote will be on C-SPAN 2.

Today I wrote a "Special Guest" blog posting on the estate tax repeal effort at TPM Cafe - a highly trafficed political blog.

TPM Cafe Post: Insanity Week on Capitol Hill

In it I discuss a possible vote outcome for the cloture vote tomorrow. Check it out and avail yourself of the opportunity to add comments at TPM Cafe.

A new batch of hits in the press today urging the Senate to back away from giving a huge tax cut to the very richest families in the country by repealing or gutting the estate tax:

• Miami Herald - Don't Repeal the Estate Tax
  
• Kansas City Star - Is Repealing the Estate Tax Irresponsible? YES
  
• Philadelphia Inquirer - Fantastical Tales of the 'Death Tax'
  
• NPR Commentary: Robert Reich - Estate Tax Pyramid Scheme
  
• Cleveland Plain Dealer - Repeal of Estate Tax Would Be Too Costly for America
  
• Bloomberg.com: Gene Sperling - Bush Values Seen in Estate Tax, Preschool Plans
  
• New York Times - A Boon for the Richest in an Estate Tax Repeal
  
• Mcall.com - Specter, Santorum Shouldn't Back Repeal of Estate Tax
  

The estate tax issue is moving fast and furious in the press this week. In addition to articles and editorials posted here yesterday, a new list of contenders for the public's attention has been added today - all supportive of keeping the tax. Check out the list below:

• Washington Post - Death and Taxes
  
• New York Times - The Estate Tax, Back on the Agenda
  
• Seattle Post-Intelligencer - Estate Tax: The True Cost of Repeal
  
• USA Today - Wealthy Can't Avoid Death - But Will They Evade Taxes?
  
• Salt Lake Tribune - The Rich Get Richer: Estate Tax Repeal Would Hurt (Nearly) Everyone
  
• Tompaine.com - Estate Tax Pyramid Scheme

A vote on the estate tax is expected for this Thursday. Republicans do not have enough votes to invoke cloture on legislation to repeal the estate tax, a point which was reiterated by Sen. Charles Grassley (R-IA) yesterday. Also, it was reported that a Senate GOP leadership aide said Monday if Democrats defeat cloture on a motion, Frist will not bring up a compromise bill. If Democrats allow debate then a compromise may be considered.

It is vitally important that all Democrats vote against cloture to preserve the estate tax as it is. The compromises being offered by Sens. Kyl and Baucus do not retain nearly enough revenue to be sufficient.

Call your Senators TODAY! Call toll-free 800-459-1887 and tell them to vote against cloture and against irresponsible reform plans, which in reality amount to little more than back-door repeal.

Speaking of estate tax reform plans, Sen. Olympia Snowe has jumped on the bandwagon and apparently has a reform plan of her own. Her counter proposal would exempt more estates than either of the other proposals, setting the threshold at $7 million ($14 million for a married couple). Her plan would tax estates at three different rates; estates between $7 million and $10 million would be taxed at 15 percent, those from $10 to $15 million would be taxed at 25 percent, and those above $15 million at 28 percent. Snowe's plan imposes lower tax rates than the Baucus plan, meaning it would retain less than 50 percent of estate tax revenue.

Since the vote will likely happen this Thursday, the estate tax has been widely covered by the media. A few select articles and releases are below. The one by Robert Kuttner which appeared in the Boston Globe is especially good.

• Boston Globe: Estate Tax Debate a Chance for Democrats to Pounce
  
• Philadelphia Inquirer: The Estate Tax: Death to the Phony Spin
  
• Los Angeles Times: Effort to Repeal Estate Tax Said to Be Faltering
  
• Free Market News Network: Estate Tax Repeal = Big Oil Windfall
  
• New York Times: Shameless in the Senate
  
• Hawkins Calls on Senate to Oppose Efforts to Slash the Estate Tax
  
• Salt Lake City Tribune: Estate Tax Repeal Would Be Federal Budget Buster

The Washington Post is running opposing op-eds today on the estate tax, which will most likely be brought to the floor this Thursday. The op-eds, written by Sebastian Mallaby and Sen. Jeff Sessions (R-AL) are worth a read.

Mallaby's article, "Reward for the Hereditary Elite..., is especially on target, pointing out how ludicrous it is for Congress to even be considering cutting this revenue stream when government expenditures are "projected to rise by nearly 3 percent of gross domestic product by 2030, a growth equivalent to the doubling of today's Medicare program."

Sessions' article, "...Or Unfair Burden on Families?" is, of course, in favor of estate tax repeal. He runs through the same tired arguments of the tax hurting small businesses and being an unfair burden on families. In reality this tax -- and a progressive tax code in general -- helps families by prioritizing investment in the common good, a healthy economy, and equality of opportunity over rewarding conglomerated wealth, which is exactly what estate tax repeal would do. Remember that Sessions too is the same Senator who went hunting for bodies after hurricane Katrina -- that is the bodies of wealthy folks who passed away in the disaster. He wanted to make an example of how the estate tax had negatively impacted the heirs of these very wealthy people. It was one of the most shameful political acts to come out of the disaster.

I'll echo Mallaby's sentiments that "repealing the estate tax is like erecting protectionist barriers around the hereditary elite." There is absolutely no excuse for Congress to be spending one minute discussing the abolition of the estate tax. This is a tax, as the Tax Policy Center points out, that will affect an estimated 12,600 estates this year, the majority of which will have absolutely no problem paying it. Last year's Census Bureau data indicated that there are 37 million poor people in the United States. If Congressional leaders had a shred of dignity they would be voting on addressing that this week as opposed to addressing an issue which affects the wealthiest sliver of our population.

Yesterday, over 700 national, state, and local organizations from every state sent a letter to the Senate urging them to reject attempts to repeal or drastically reduce the estate tax. The wide and varied list - from children's, women's and minority rights advocates to health care groups, from religious and labor organizations to tax policy think tanks and citizen action coalitions - represents the broad diversity and majority of Americans who favor retaining the estate tax.

The Senate plans to vote next week - there's still plenty of time to make your voice heard. Email Your Senators Today and demand they act for fairness and equity - demand they preserve the estate tax.

Last week Sen. Max Baucus apparently began circulating a reform plan to counter Sen. Kyl's proposal, which will most likely be offered up next week after a vote on estate tax repeal. Baucus' counteroffer includes a graduated tax rate structure, setting rates at 15, 25, and 35 percent depending on the size of the estate. Baucus' offer, which would likely retain more of the revenue than Kyl's plan, would still likely prove to be insufficient in both keeping the tax code truly progressive and raising enough revenue to fund national priorities. A recent article in the Washington Post, Estate Tax Lunacy, notes that Baucus' plan would deplete revenue by only $500 billion to $600 billion during the decade, which "is a lot of money to drain from public coffers just when boomers are going onto Social Security and Medicare and the number of employers providing health insurance."

Also, Rep. Henry Waxman's staff has put out a report the impact that estate tax repeal would have on the families of the senior executives for the major oil companies. That can be found here.

If you're interested in a religious take on estate tax repeal (and how morally outrageous it would be) check out Jim Wallis' most recent column on the Estate Tax, "To Protect the Common Good."