WASHINGTON–Independent insurance agents are voicing strongsupport for estate tax reform legislation passed by the House earlySaturday.

The House passed the bill, H.R. 5970, the Estate Tax andExtension of Tax Relief Act of 2006, by a 230-180 vote with onemember voting present.

Charles E. Symington Jr., senior vice president for governmentaffairs and federal relations for the Independent Insurance Agentsand Brokers of America, said the IIABA and the “many smallbusinesses we represent thank the U.S. House of Representatives forpassing estate tax relief last week.”

“This permanent tax reform will provide certainty and ease thesignificant tax burdens as our members look to pass along theirbusinesses to family members,” he added, noting, “We hope theSenate will act in kind this week before they go into their Augustrecess.”

According to the House Republican leadership, “The bill willprevent almost all Americans from ever paying the estate tax.”

But, according to most congressional staffers and lobbyists, thebill faces a tough road in the Senate, where it is expected to betaken up Friday.

Democrats have successfully blocked action on such legislationin the Senate twice this year already.

Additionally, many Republicans, especially those on the SenateFinance Committee, are upset because House Republican members on apension reform conference committee declined to show up lastWednesday for a session where a vote on a compromise pension reformbill, combined with provisions extending several popular tax cuts,was to be voted on.

Instead, the House took the combined bill, removed the tax breakprovisions, and attached it to a newly-devised estate tax reformplan before sending it to the House floor for action earlySaturday.

The bill as passed by the House would, in addition to the estatetax relief, extend through 2007 a number of popular tax breaks,including the work opportunity tax credit, the research anddevelopment tax credit and the state sales tax deduction. The billwould also increase the federal minimum wage from $5.15 per hour to$7.25 over three years.

Under current law, the estate tax gradually declines until it isfully eliminated in 2010. However, in 2011, the tax returns in fullforce.

Specifically, the estate tax provision in the House billincreases the estate and gift tax exemption amount through aphase-in to $5 million per person effective January 1, 2015, andthen indexes it for inflation.

The measure also reunifies the estate, gift andgeneration-skipping transfer taxes and reduces estate and gift taxrates.

Language in the bill says estates valued at up to $25 million(indexed for inflation) will be subject to tax at the capital gainstax rate (currently 15 percent, set to increase to 20 percent in2011 unless extended).

Amounts in excess of $25 million (indexed for inflation) or morewill be subject to a phased-in reduced rate of tax of 30 percent.The 30 percent tax rate is fully phased-in effective January 1,2015.

The bill also makes portable the spousal estate and gift taxexclusion to allow married couples to take full advantage of the $5million per person exemption amount (indexed for inflation) bycarrying over any unused exemption to the surviving spouse, subjectto the phase-in of the exemption amount.