What: All Issues : Fair Taxation : S Con Res 21. (Fiscal 2008 budget resolution). Amendment by Kyl of Arizona that would reduce the estate tax without offsets/On agreeing to the amendment (2007 senate Roll Call 83)
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S Con Res 21. (Fiscal 2008 budget resolution). Amendment by Kyl of Arizona that would reduce the estate tax without offsets/On agreeing to the amendment
senate Roll Call 83     Mar 21, 2007
Progressive Position:
Nay
Progressive Result:
Win

This vote occurred on an amendment by Jon Kyl, R-Ariz., to the bill that serves as the blueprint for Congress' budget priorities in fiscal 2008. The budget resolution sets overall spending targets for the Appropriations committees and outlines other budget rules. A cornerstone of the fiscal 2008 budget resolution (and key to the Democratic leadership's pledge to remain fiscally responsible) is a congressional rule known as PAYGO, which requires any bill that creates new spending or reduces revenues be offset by a reduction in spending, or creation of new revenue.

Kyl's amendment would have freed up money to be used for easing the estate tax, which is the tax charged on property that's willed to someone upon their death (hence why Republicans often refer to the tax as the "death tax.") The amendment would not have offset changes to the estate tax; rather, the amendment would simply have exempted any changes to the estate tax from the PAYGO rules. Language actually changing the estate tax was not included in the resolution because it is beyond the scope of the budget resolution -- those types of changes would have to be drafted by the Finance Committee, which has jurisdiction over tax policy.

"We can't pass a budget that doesn't include an assumption that we are going to reform the death tax. We ought to be repealing the death tax. But what we have done in this amendment is to provide an amount of money that would accommodate the kind of death tax reform that has been supported by both Republicans and Democrats," Kyl said.

Budget Committee Chairman Kent Conrad, D-N.D., opposed Kyl's amendment, saying it would cost about $75 billion but does not offset that spending with cuts to other programs or new revenues. "The problem is, all the money is spoken for. So to add the Kyl amendment would drive us back into deficit, substantial deficit. I say to my colleagues, I think that would be a mistake," Conrad said.

Kyl's amendment also would have extended tax breaks for children, marriage, adoptions, earned income for combat pay and other items as sweeteners. But the main thrust of his amendment dealt with the estate tax provisions, which has been a priority for fiscal conservatives for some time. Republicans argue that the estate tax hampers small businesses and family farmers; they also say the estate tax amounts to "double taxation."

Democrats counter that attempts to repeal the estate tax amount to corporate welfare, since the tax affects a relatively small number of people. In order to be subject to an estate tax, the estate being willed must exceed a total taxable value of $1 million -- according to the Internal Revenue Service, only 2 percent of estates are subject to the estate tax.

Democrats were successful at turning back the amendment, 47-51. Two Republicans joined Democrats in voting no -- Olympia Snowe of Maine and George Voinovich of Ohio. Thus the bill went forward without language that would have made money available for easing estate tax rules.

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