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- iHaveNet.com: Politics
by Alex Kingsbury
Democrats plan to renew the 2010 tax retroactively
As tax season gets underway, congressional Democrats are facing criticism for their failure to renew the estate tax. The tax, a levy on the wealthiest Americans, expired on the first of the year because Democrats were unable to find support for even a temporary continuation of the tax while they debated a longer-term solution. Despite assurances from Senate Majority Leader Harry Reid that the body will approve a retroactive fix when it returns to work next month, Senate Finance Chairman Max Baucus called it "embarrassing" that the Democratic-controlled
A quirk in the existing law means that the estate tax, which was reduced during the Bush administration but still brought in some
Politically explosive -- the
Opponents, however, argue that the estate tax amounts to double taxation, first when the money is earned and again when it is transferred to heirs. Some economists share this view, arguing that it is in the goverment's long-term interst to encourage families to keep their earned wealth and pass it to the next generation. Eliminating the tax, critics say, will lead to greater investment in family-owned businesses and promote job creation.
The tax itself affects fewer than 2 percent of estates, and that number has been on the decline as the dollar limit for exemption has risen over the past few years, according to statistics published by the
Earlier this year, the House narrowly passed a bill that would have kept the current estate taxes unchanged, but the measure won little support in the
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Lapse of Estate Tax Raises Doubts About Democrats | Alex Kingsbury
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