Although the U.S. Senate is unlikely to abolish the estate tax this week, there is emerging interest in a compromise measure that would exempt from taxation a large chunk of an estate’s value.

Don Shrubshell photo

Rhonda Perry, a Howard County farmer and program director for the Missouri Rural Crisis Center in Columbia, opposes repeal of the estate tax, the subject of debate in the U.S. Senate.

The proposed compromise would exempt from the tax any property worth between $5 million and $10 million, compared to the existing exemption level of $2 million. The compromise also would lower the tax rate for higher-valued properties to 15 percent from 45 percent.

The compromise, which is being negotiated by Sen. John Kyl, R-Ariz., and Sen. Max Baucus, D-Mont., has a better chance of obtaining the 60 votes needed to pass the Senate than an outright repeal, said Sen. Jim Talent, R-Mo., who favors the compromise.

"I would support a compromise that would lower the tax, reform it and simplify it," Talent said today. "I strongly support getting rid of it, but I would strongly support a compromise that did those three things."

Scott Baker, spokesman for Rep. Kenny Hulshof, R-Mo., said the congressman, who sponsored a complete repeal of the tax in the U.S. House, would also be open to a plan similar to the one presented by Kyl and Baucus.

"The House has on multiple occasions supported complete repeal in a bipartisan fashion," Baker said. "That being said," Hulshof "can read the tea leaves and has certainly not ruled out a reasonable compromise."

State Auditor Claire McCaskill, who is Talent’s opponent in the fall elections, blasted plans to repeal the tax.

"Washington should stop taking care of millionaires and start taking care of the middle class," McCaskill said today in a written statement. "I support extending the current exemption so that we don’t hurt family farmers. But to continue to protect the very wealthiest slice of America at the expense of our children, who are going to have to pay the bill, is immoral."

Lawmakers wrangling over the proposed elimination of the tax drew criticism yesterday from a group that included two Mid-Missouri farm organizations - a constituency commonly touted as a likely beneficiary of the tax’s repeal.

"We are very disturbed that elected representatives from the state of Missouri consistently use family farmers for their logic for this bad move to repeal the estate tax," said Rhonda Perry, a Howard County farmer and program director of the Missouri Rural Crisis Center in Columbia.

Yesterday at a news conference, Perry and representatives of groups including the Missouri Progressive Vote Coalition; the American Federation of State, County and Municipal Employees; and the Missouri Farmers Union called for Congress to keep the tax in place.

Repealing it, they said, would benefit superwealthy conglomerates at the expense of family farmers.

"There’s a lot of barriers in agriculture, particularly for family producers right now," said Amy Meyer of the Missouri Farmers Union. "And we feel as an organization and our members feel that the total repeal of the estate tax will further depress agriculture and concentrate the wealth further into the hands of the few, larger producers and larger operations."

Tom Kruckemeyer, chief economist with the Missouri Budget Project, said if the Senate repeals the estate tax, Missouri will lose millions of dollars in revenue.

"In fiscal year 2001, the state of Missouri collected approximately $157 million from the estate tax because Missouri and all states were allowed to keep and collect a portion of the federal estate tax," Kruckemeyer said. "By virtue of the repeal of the estate tax, over four years, Missouri and all states have lost a substantial sum of money."

Talent called that position shortsighted.

"I think people are not looking at what the tax is costing the economy," Talent said. "This tax is aimed right at the small-business sector. We really don’t want a tax system that penalizes people that are trying to save, invest and create jobs."

Sen. Kit Bond, R-Mo., in a written statement called the tax "an unfair and overly burdensome complexity" that harms Missouri farmers: "Unfortunately, the onerous death tax discourages many citizens from handing their businesses to the next generation."