Timber Becomes Tool in Effort to Cut Estate Tax

By EDMUND L. ANDREWS
Published: June 21, 2006

WASHINGTON, June 20 — In a new attempt to permanently reduce the estate tax on inherited wealth, House Republican leaders moved on Tuesday to win over crucial Democrats with a tax sweetener for timber companies.

Admitting that Congress would not be able to abolish the estate tax this year, House leaders unveiled a compromise that would stop just short of full repeal and would give the Senate another chance to take up the issue.

The latest proposal would eliminate the tax for all estates worth less than $5 million — up to $10 million for couples. That would cover more than 99.5 percent of estates, according to Congressional estimates. In addition, the compromise would reduce the tax rates on the few estates that would still be subject to a tax.

"We need to do what is reality, what you can get done with the Senate," said Representative J. Dennis Hastert of Illinois, the House speaker. "We just want to bring death to the death tax."
The Republican-controlled House has already passed a bill that would permanently abolish the estate tax, which under current law is set to phase out gradually by 2010 and then return in full force in 2011. But in a crucial procedural vote on June 8, Senate Republicans came up 3 votes short of the 60 needed to limit debate and prevent a filibuster by Democrats. That vote forced Republicans to consider a compromise. >>>cont

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