Wednesday, March 25, 2009

War of Amendments

By a 51-48 vote, the Senate embraced a nonbinding but symbolically important amendment by Arkansas Democrat Blanche Lincoln D-Walmart AR and Arizona Republican Jon Kyl to exempt estates up to $10 million from the estate tax. Estates larger than that would be taxed at a 35 percent rate.

The amendment is taking heavy fire.

NY York Times snarks, "for Senator Blanche Lincoln, Democrat of Arkansas, and Senator Jon Kyl, Republican of Arizona, the most pressing issue is clear: America’s wealthiest families need help. Now."

Even from the tax-cut friendly Washington Post.

It asks

More Tax Cuts for the Rich?

"The hypocrisy here is breathtaking. Reducing the estate tax would harm charities because it eliminates some of the incentive for making charitable bequests -- yet some of the very senators who back estate tax cuts were quick to denounce Obama administration tax proposals that they argued would hurt charitable giving. More fundamentally, it is hard to stomach those who argue for more tax cuts -- and then bemoan the failure to stanch rising deficits. A vote for this amendment, at this time of so much red ink and so much suffering, would reflect the most skewed of priorities."

On the flip side, Senator Durbin D-IL introduced and passed an amendment 56 to 43 that provides that no additional estate tax relief beyond that which is already assumed ($3.5/$7.0)in this resolution, which protects over 99.7 percent of estates from the estate tax, shall be allowed under any deficit-neutral reserve fund unless an equal amount of aggregate tax relief is also provided to Americans earning less than $100,000 per year.

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