A death tax rate closer to zero

In our opinion, the right rate of death tax is zero. Last week, the Senate voted 57-43 for zero. However, the Senate's rules require 60 votes, so the rate will not be zero. But let it be as close to that as possible.

Sen. Jon Kyl, R-Ariz., proposed 15 percent, which is the rate of federal income tax on long-term capital gains. A family company, with its assets in land, buildings, machines, trucks, and maybe patents or a brand name, would struggle to produce 15 percent of its net worth in cash, all at once, for payment to the government. In most cases it could be done. Certainly, 15 percent is a vast improvement over the current long-term rate of 55 percent.

Kyl has had a tough time rounding up three additional votes — which include our own senators, Patty Murray and Maria Cantwell, who both voted against the zero rate. Kyl's latest proposal is for a top rate of 30 percent on the largest estates, with 15 percent on the ones slightly smaller.

A 30-percent rate is too much. It might be all right for an heir inheriting a pot full of stocks and bonds, but not for the new owners of a privately held business. An ordinary business simply does not have 30 percent of its assets floating unencumbered, as an easily extractable surplus.

And there are many, many family businesses. All of them should face a rate of tax that a business could reasonably be expected to pay.

A tolerable top rate might be 15 percent of assets. Not 30, and not close to 30.

Kyl should stick to his earlier proposal — and our senators should support it.