The U.S. Senate, with Senate Republicans leading the charge, voted 59-39 on Friday to gradually repeal inheritance taxes originally created to prevent a stratification in wealth. The House passed the same bill, H.R. 8, or the “Death Tax” Elimination Bill, by a 279-136 vote last month.
As approved by both chambers, H.R. 8 would phase out estate and gift taxes over the next decade by reducing tax rates by five percent each year until they are completely eliminated.
“Senate approval of H.R. 8 sets the stage for historic repeal of the so-called death tax. This legislation is significant for independent insurance agents. As family-owned enterprises, many agencies are faced with the prospect of closure by the heirs following the principal owner’s death to pay the prohibitive and unfair death tax,” says IIAA Vice President of Federal Government Affairs Maria L. Berthoud. “Unfortunately, surviving family members have no other choice but to sell the family business in order to pay the hefty estate tax bill. H.R. 8 will reverse this alarming trend and simultaneously aid the perpetuation of independent insurance agencies and other family-owned businesses from one generation to another.”
President Clinton has vowed to veto the bill once it reaches his desk, calling the bill “costly, irresponsible and regressive.” In a statement released Friday, Clinton said the bill’s costs would balloon as time goes on, causing a loss of $100 billion in tax revenue for 2001-2010 and $750 billion in lost revenue for 2011 to 2020.
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