State Journal Register

August 2, 2006

Durbin in forefront of fight to stop estate tax cut

By Paul M. Krawzak
Copley News Service

WASHINGTON - Sen. Dick Durbin, taking a lead role in a Democratic campaign to defeat a bill raising the minimum wage and cutting the estate tax, is blasting the legislation that is expected to be voted on as early as Friday.

In a speech on the Senate floor Tuesday, Durbin, D-Springfield, expressed Democratic senators' support for hiking the minimum wage while deriding Republican efforts to reduce the estate tax. "This tax, this federal estate tax, affects very, very few Americans," said Durbin, who serves as his party's whip or No. 2 leader in the Senate. "Only those in the highest income categories."

Durbin and Sen. Barack Obama, D-Chicago, are siding with Democratic leaders' efforts to defeat the legislation, which also would extend several popular tax provisions that expired last year. The estate tax has been shrinking since 2001 under the terms of a tax cut championed by President Bush. It will temporarily expire in 2010 before returning in 2011.

Majority Leader Bill Frist, R-Tenn., has warned that the upcoming vote is the only chance to pass a minimum wage hike or estate tax reduction this year.

Defending an estate tax cut, he said it would "finally bring fairness to that wrongful tax on death."

Senate Minority Leader Harry Reid, D-Nev., has vowed to make defeating the estate tax cut a priority.

Democrats have blasted the estate tax cut as a sop to the wealthy that will increase the $8 trillion national debt.

The Joint Committee on Taxation said cutting the tax would cost $268 billion in lost revenue between 2006 and 2016.

A very close vote is expected as GOP leaders seek to convince several holdout Republicans and a handful of Democrats to support the legislation. Sixty votes are needed to shut off debate and bring the measure to a vote in the Senate, where there are 55 Republicans, 45 Democrats and one independent.

Rep. Ray LaHood, R-Peoria, had a hand in getting the House to consider a minimum wage hike in June when he was one of just seven Republicans on the Appropriations Committee to join committee Democrats in sending a wage hike proposal to the House floor. The House approved the latest plan, including the estate tax cut, last Saturday. LaHood and Reps. John Shimkus, R-Collinsville, and Timothy Johnson, R-Sidney, voted in favor of it.

Rep. Lane Evans, D-Rock Island, was absent from the 230-180 vote.

The legislation would gradually raise the $5.15 an hour minimum wage to $7.25 an hour by June 2009.It also would reduce the estate tax from the levels that it is set to return to in 2011. Under the bill, the amount of assets in an estate that are exempt from the tax would rise to $5 million per individual by 2015. Under current law, the amount exempt would be $1 million in 2011.

The bill would cut the top tax rate on estates from 55 percent in 2011 to 20 percent for estates valued up to $25 million. The tax rate for estates worth more than $25 million would be 40 percent, dropping to 30 percent in 2015.

The legislation also extends through 2007 several expiring tax cuts, including a research and development credit for businesses, a provision allowing individuals to deduct state and local sales taxes from their income tax returns and a $4,000 deduction for higher education expenses.

Durbin said the estate tax cut would cost $750 billion over 10 years, a figure he said was "suggested" in a Washington Post story and is more than twice as much as official estimates. Republicans, he said, "in time of war, a war that costs us $3 billion per week - are proposing tax cuts for the wealthiest people in America."

He said it "tells the whole story about their priorities."