Member Login

Action Alert 20050804 | NAIFA
Advocacy

Action Alert

(Archive only: This Alert is no longer active)

To: NAIFA Members in the states of Arizona, Arkansas, California, Colorado, Louisiana, Maine, Ohio, Rhode Island, Washington, and West Virginia

CC: NAIFA Members in All Other States

From: David E. Smithkey, CLU, RFC, NAIFA President

Date: June 1, 2006

Subject: Estate Tax Vote(s) in U.S. Senate

Congress voted in 2001 to phase in repeal of the estate tax over 10 years. There were two major flaws with what Congress did:

Next week the U.S. Senate is expected to vote on whether to permanently repeal or modify the estate tax. In addition to outright repeal, it is possible that several “reform” proposals will be the subject of intense negotiations behind the scenes. Twelve Senators from nine key states hold the key to any outcome. The outcome is expected to be close either way.

U.S. Senators Considered Central to Resolution of the Estate Tax Issue

Arizona: Sen. John McCain (R)
Arkansas: Sen. Mark Pryor (D)
California: Sen. Dianne Feinstein (D)
Colorado: Sen. Ken Salazar (D)
Louisiana: Sen. Mary Landrieu (D)
Maine: Sen. Olympia Snowe (R), Sen. Susan Collins (R)
Ohio: Sen. Mike DeWine (R), Sen. George Voinovich (R)
Rhode Island: Sen. Lincoln Chafee (R)
Washington: Sen. Patty Murray (D), Sen. Maria Cantwell (D)

Action Requested
Please go to capwiz.com/naifa to access NAIFA’s fast and simple-to-use Legislative Action Center. We ask that you take five minutes to send a letter (click on "Estate Tax Action Alert") to your senators urging them to vote against permanent repeal of the estate tax. The letter is written for you. All you have to do is provide your contact information and zip code and press send (You can edit the letter if you choose). The letter will automatically be sent to your Senators.

NAIFA Position
NAIFA favors reform of the estate tax over repeal. We support:

Simply freezing the exempt amount and tax rates that are now scheduled to be in effect in 2009 ($3.5 million per person; 45% rate) would do the job. Through reform, 99.7% of estates in the United States would be exempt from the estate tax.

NAIFA supports improving the tax incentives applicable to a wide range of our products--life insurance, LTCI, annuities, DI, retirement, health insurance, etc. Like it or not, we are in competition with all sorts of other proposed uses of tax revenue, for example, lowering the tax rate on stock dividends, or Lifetime Savings Accounts. Repealing the estate tax effective in 2006 results in a net loss of tax revenue of $389 billion from 2006 through 2016. From 2012 through 2021, the revenue loss will be $796 billion. That’s tax revenue that NAIFA believes could be directed toward improving tax incentives for life insurance and other financial protection products. Our chances of getting improved incentives will decrease if revenue is directed elsewhere.

But What If I Disagree?
NAIFA leaders recognize that NAIFA members are divided on the issue. Some NAIFA members philosophically believe repeal is the right thing to do. Others believe there are valid social reasons to maintain an estate tax at some level. Other members who might support repeal are opposed to doing so right now because of a concern over diverting tax revenue from other worthy causes and/or increasing our country’s national debt. Every study shows that the national debt will increase if the estate tax is repealed--unless major offsets are found. Under the U.S. political system, offsets are really difficult to enact.

Questions: If you have any additional questions, please contact Mike Kerley at 703-770-8155, frontline@naifa.org.