Trees and the Estate Tax

Including a tax cut for timber companies may be the key to obtaining approval of a permanent reduction in the estate tax.

Here are some excerpts from Edmund L. Andrews, Timber Becomes Tool in Effort to Cut Estate Tax, NY Times, June 21, 2006:

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. * * * In addition, the compromise would reduce the tax rates on the few estates that would still be subject to a tax.  * * *

The House bill is similar to a compromise that Senate Republicans circulated two weeks ago, without success. But it includes a tax cut that would save timber companies about $900 million over the next three years, a new twist that could win as many as four more Democratic votes in the Senate.

The provision would reduce the corporate capital gains tax, which is assessed on sales of timber, to about 14 percent from 35 percent. Two of the timber industry’s strongest advocates are the Democratic senators from Washington — Patty Murray and Maria Cantwell — who both voted with other Democrats against blocking a filibuster on the estate tax. * * * Other Democratic Senators — Mark Pryor and Blanche Lincoln of Arkansas and Mary L. Landrieu of Louisiana — were co-sponsors of a similar timber tax cut last year.