Congresswoman Jennifer Dunn (R - Wash.) and Congressman John Tanner (D - Tenn.), who sponsored the legislation last year, have joined forces to introduce the Death Tax Elimination Act of 2001. 

Rep. Jennifer Dunn	Rep. John Tanner

While it passed in both houses of Congress, last year's measure, which would have repealed the federal estate, gift, and generation-skipping transfer tax by 2010 through rate reduction over 10 years, died by presidential veto in August. The House failed to garner the 288 votes needed to override the veto.

Citing President George W. Bush's campaign proposal for death tax repeal, Dunn expressed optimism about the legislation's chance for passage. "This is the official start of the funeral procession of the death tax," she said, adding, "I'm confident the White House will work with Congress on behalf of small-business owners and family farmers to eliminate the onerous death tax."

The measure has gained support from over 175 original co-sponsors, as well as backing by groups that include the National Association of Women Business Owners, the Black Chamber of Commerce, the Hispanic Chamber of Commerce, and the National Indian Business Association.

But the cost of the move has raised some eyebrows. According to the Center on Budget and Policy Priorities (www.cbpp.org), a nonpartisan research organization and policy institute that conducts research and analysis on government policies and programs, by the time the proposed legislation was fully in effect and the estate tax had been repealed, the proposal would have cost the federal government about $50 billion a year.

In a report detailing the cost of the repeal of the estate tax revised in December, CBPP reported that combined, the states would have lost approximately $5.5 billion in revenue in fiscal 2000 if estate tax repeal had already been in effect, and that by 2010, when the repeal would be fully effective under the proposal, state revenue loss would approach $9 billion. In addition, CBPP said about two-thirds of the states could face total loss of estate tax revenue as a result of the federal repeal.

According to the CBPP, fewer than 43,000 people, less than 1.9 percent of the 2.3 million people who died in 1997, had to pay any estate tax that year. The CBPP report cited Joint Committee on Taxation projections that say that the percentage of people who die whose estates will be subject to estate tax will remain at about 2 percent for the foreseeable future. The estate tax exemption, which stood at $675,000 in 2000, will rise to $1 million by 2006.

According to CBPP, the bulk of estate taxes are paid on very large estates. In 1997, CPBB said the largest 5 percent of estates that were of sufficient size to be taxable, about 2,400 estates, paid nearly half of all estate taxes.

-- By Melissa Klein

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