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Estate Tax: Legislative Activity in 2002, February 5, 2003 1 (February 5, 2003)

handle is hein.tera/crstax0148 and id is 1 raw text is: Order Code RS21224 Updated February 5, 2003 CRS Report for Congress Received through the CRS Web Estate Tax: Legislative Activity in 2002 Nonna A. Noto Specialist in Public Finance Government and Finance Division Summary This report summarizes actions in Congress during 2002 to make the repeal of the estate tax permanent and other proposals that would have retained but altered the estate tax. Under provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16, enacted June 7, 2001), the estate tax is scheduled to be repealed in 2010 but reinstated in 2011. All tax provisions of EGTRRA are scheduled to sunset on December 31, 2010. On April 18, 2002, the House passed H.R. 586, part of which would have removed the sunset provision and thereby made permanent the repeal of the estate tax and all other provisions of the tax cut law. On June 6, 2002, the House passed H.R. 2143 which would have removed the sunset provision solely from the estate tax provisions of EGTRRA (Title V). The House defeated a Democratic substitute amendment offered by Representative Pomeroy that would have retained the estate tax but increased the exclusion to $3 million per decedent in 2003. The Senate leadership agreed to take up the estate tax alone, before June 28, 2002, through H.R. 8, under a unanimous consent agreement. On June 12, 2002, the Senate failed to waive the budget point of order on the three amendments offered. The Gramm- Kyl amendment, identical to H.R. 2143, would have removed the sunset provision on the estate tax provisions of EGTRRA, making estate tax repeal permanent. A Democratic substitute amendment offered by Senator Conrad would have kept the maximum estate tax rate at its 2002 level of 50% and increased the exclusion per decedent to $3 million in 2003 and $3.5 million in 2009. An amendment to the Democratic substitute offered for Senator Dorgan would have provided a full tax deduction for qualified family-owned business interests starting in 2003, increased the exclusion to $4 million per decedent in 2009, and permitted the maximum tax rate to continue to fall to 45% for 2007 and after. The underlying estate tax repeal bill, H.R. 8, was not voted on and was returned to the Senate calendar. On September 19, 2002, the House approved a resolution, H.Res. 524, urging Congress to complete action on the Permanent Death Tax Repeal Act of 2002 (H.R. 2143) before the 107th Congress adjourned, in effect calling on the Senate to approve the measure passed by the House on June 6, 2002. The Senate did not act on the bill. This report will not be updated. Congressional Research Service ** The Library of Congress

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