Notice sent out today by the Life
Insurance Underwriters...
Dear AALU Members:
Though Democrats and Republicans have been engaged in
conversations on estate tax reform throughout the summer, we
have learned that Senate Majority Leader Bill Frist plans to
hold a vote on estate tax repeal at the end of next week. The
pro-repeal groups, such as the National Beer Wholesalers
Association, have their grassroots efforts in full swing and are
pressuring their Senators to vote in favor of full repeal. As
noted in Friday's Wall Street Journal, the move is largely
tactical, in an effort to "smoke out" Senators whom the
pro-repeal forces perceive as wavering or politically vulnerable
on the issue. Pushing the Democrats and moderate Republicans
into a politically difficult vote before providing adequate time
to find middle ground on estate tax reform could sink reform
efforts for this year.
Any estate tax repeal vote will require a 60 vote margin for
approval. Currently, there are 60 Senators that are on record as
having supported estate tax repeal at some point in time. We
believe that budgetary concerns have tempered the support of
some moderate Democrats and Republicans on this issue, and do
not believe that adequate support exists for the passage of
estate tax repeal in the current budget environment. However, it
remains crucial that Senators be continually reminded of the
fiscal gravity of full estate tax repeal.
Interestingly, earlier this week, Senator Charles Schumer
(D-NY) explicitly asked Federal Reserve Chairman Alan Greenspan
his thoughts on Congress passing estate tax repeal or reform
that costs 80-90% of repeal without appropriately offsetting
such a proposal by tax increases or spending cuts elsewhere.
Chairman Greenspan reiterated his support for the enforcement of
PAYGO, a budget mechanism which requires the offset of tax cuts
or spending increases. He stated that PAYGO is "an essential
ingredient going forward and that all programs, both spending
and revenue programs, come under that." He also noted that
Congress should not advance tax policy at this time that doesn't
conform to the PAYGO rules. Greenspan is a strong proponent of
reducing taxes on capital, but also believes such policy should
be advanced in a fiscally responsible manner.
This important message needs to be imparted on members of the
Senate as they prepare to consider a tax cut for the wealthiest
1% of the population that is estimated to cost nearly a trillion
dollars over ten years. Communications to Senators will not only
help us with this immediate vote, but with reform negotiations
on this issue.
AALU is mobilizing all of its resources on this issue of
crucial importance to the organization's membership. I will
continue to keep you updated on developments, and please feel
free to contact the AALU Government Affairs staff at
888-275-0092 with any specific questions you may have.
Finally, if you have not already done so, please let us know
by reply email if you will be participating in our extensive
discussion on efforts and outlook on estate tax issue in our
special "hot topic" teleseminar on Wednesday, August 3rd at
11:00 a.m. Eastern Time.
Sincerely,
Roger B. Sutton, JD, CPA
Association for Advanced Life Underwriting
President
