Estate tax debate comes to a head

The Senate is gearing up for a vote on the Paris Hilton Tax, i.e. the Estate Tax. Republicans lost momentum for a repeal last fall, when Hurricanes Katrina and Rita rudely reminded the public about why it's important for governments to have money.

But now, in a bid to shore up support among the 5,000 millionaires that would benefit from a repeal, they are pushing again. The only problem: Senate Majority Leader Bill Frist (R-TN) doesn't have the votes for the legislation. But OMB Watch explains why the danger hasn't passed:

Majority Leader Bill Frist (R-TN) was unable to hold an estate tax vote last fall because of a post-Hurrican Katrina legislative shuffle, but now that enough time has passed he is back at it again, promising his Republican colleagues he will schedule a vote that will "kill the death tax forever." Unfortunately for Frist, he does not have the 60 votes necessary among his colleagues to repeal the estate tax. What he and other anti-tax GOP leaders may have though is enough votes to pass an irresponsible and senseless reform plan that will be put forth by Sen. Jon Kyl (R-AZ). Kyl's reform plan would do little more than effectively gut the estate tax, and if passed would prove to be more dangerous than if the Senate chooses not to act at all.

Eliminating or drastically reducing the estate tax would not only pad the pockets of the rich but it would also be a huge blow to charitable giving. Full repeal would reduce federal revenue by nearly $1 trillion over the first ten years -- a devastating loss for the Treasury to endure in times of huge budget deficits. We are currently facing the growing fiscal challenges of an aging population, rising health care costs, unmet education needs, homeland security, and reconstruction efforts, and a healthy balance of revenues and expenditures is critical in order to meet these needs. If the estate tax is ever repealed, this revenue loss will be made up by an eventual tax hike on lower and middle-income taxpayers and/or by cutting services that families depend on.

Remember -- this is a great issue for progressives, especially in the South. Over 80% of the public opposes a repeal of the Paris Hilton Tax.

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