WASHINGTON–The Senate Republican leadership has decided topostpone a vote on an estate tax reform bill that has strongsupport from insurance agents until after Congress returns from itsJuly 4th recess on July 10.

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The Tuesday decision was announced by Senate Majority LeaderWilliam Frist, R-Tenn. It was a sign that Republicans, despiteintense pressure on Democrats to provide support, still could notmuster the 60 votes needed to clear the bill for floor debate.

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But officials of the Independent Insurance Agents and Brokers ofAmerica urged negotiators to keep talking.

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“The IIABA is a supporter of either repeal or significant reformof the estate tax,” said Charles E. Symington Jr., senior vicepresident for government affairs and federal relations.

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“While we are disappointed that the most recent reformcompromise could not be moved forward at this time, we willcontinue to work with Senate leadership as they attempt to movethis very reasonable proposal forward in the near future,” Mr.Symington said.

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He called the issue “too important to small-business ownersacross America to stop now when we are so close to a deal.”

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The Permanent Estate Tax Relief Act of 2006 (H.R. 5638) waspassed by the House June 22, on a 269-156 vote.

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In his June 27 statement, Sen. Frist said, “Everyone should beclear: The Senate will vote on a permanent reduction to this tax–atax that destroys small businesses and family farms.”

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However, there is concern within Mr. Frist's caucus about theHouse bill. A compromise supported by Senate Republicans would cost$275 billion over 10 years.

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But there are concerns among GOP lawmakers that it would notgive credit toward federal estate taxes for state taxes on estates.Second, the rates paid above the threshold level under the Housebill would be linked to the capital gains tax rate, now 15percent.

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The concern of Republicans is that when the 15 percent ratecomes up for renewal in 2010, it would “poison the waters” forkeeping the rate at 15 percent and not returning it to the old rateof 20 percent that existed before 2002.

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The House bill would increase the exemption amount to $5 millionper person effective Jan. 1, 2010, and it would reduce the tax rateon estates up to $25 million to the capital gains tax rate.

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