When the House votes on a proposed repeal of estate and gift taxes this week, Republicans who control the chamber will have people like Mike Nobis of Quincy, Ill., in mind. Nobis, his brothers and sisters lost their parents 17 months ago when their motor home blew a tire and overturned. To prevent such a tax burden from sinking a business his father started, Nobis, as company president, put off buying new digital equipment and persuaded the company's 45 employees to pay more than twice as much for health insurance.
Democrats look at the estate tax through a completely different lens.
Democrats note that the estates of only 2 percent of all people who die are taxed at all, and only a fraction of these people owned farms and small businesses. These clashing perceptions have long colored the struggle to do away with estate taxes and with gift taxes as well, both of which were adopted early in the 20th Century to prevent concentration of wealth. Last year, both chambers of Congress approved a 10-year phaseout of estate and gift taxes, only to be thwarted by President Bill Clinton's veto. The House now appears on track to approve the phaseout bill supported by President Bush, but Democrats hope to block it in the Senate and reform the law rather than repeal it. The estate tax and gift tax are closely related.