CHN: Republican Leaders Bent on Gutting the Estate Tax Are Running Out of Options
After two failed attempts in recent months to gut the estate tax, Republican leaders are desperately searching for ways to package yet another plan that will garner the additional support needed to push the legislation through Congress before September 29. They recognize that the likelihood of passing such legislation may diminish after the November elections.
Several options are under consideration. One would be to tweak the so-called ‘trifecta’ bill which links a drastic reduction in the estate tax costing $750 billion over 10 years with an increase in the minimum wage and a package of extensions to prevent certain popular tax breaks including the research and development and welfare-to work tax credits, and the college tuition deduction from expiring. Changes could include dropping the provision in the minimum wage section that could have drastically reduced wages for workers who rely on tips in seven states. It would have applied to the states that now require employers to pay the full minimum wage to workers who also receive tips. Another strategy being discussed is to retain the components of the trifecta and add another provision that reverses planned cuts to physician payments under Medicare. Jurisdictional issues among committees in the House may close this option. A third possibility would be to attempt attaching an estate tax provision to the must-pass continuing resolution. (See appropriations article.)
Democratic leaders are advocating passing a clean tax cut extenders package before recess. They, along with many Republican members of the House in tight re-election fights, would also like to vote on a free-standing bill to increase the minimum wage. However, Republican leadership is loath to allow a minimum wage increase without exacting a price. In the past, the leadership has tied raising the minimum wage to business tax breaks or erosions of labor standards; gutting the estate tax ups the ante quite a bit.
Up to now, the focus has been on estate tax reductions. With time running out, Republican leaders may relent and move a separate tax cut extenders bill, or they may hedge their bets hoping to pass something during the lame duck session in November.