Magazine article Editor & Publisher

Death of Estate Tax to Be Slow

Magazine article Editor & Publisher

Death of Estate Tax to Be Slow

Article excerpt

Weeklies most likely to feel impact

Champions of family newspaper ownership can claim victory now that the estate tax will be phased out by 2010 under the $1.35 trillion tax cut set to be signed by President Bush this week. Or can they?

Repeal comes, but with caveats. The top rate, which at 55% has been blamed for the demise of family-owned businesses, still wouldn't fall below 45% until 2010, while the exemption level would rise to only $3.5 million from $675,000 over eight years.

Finally, in a bizarre quirk, the estate-tax provision sunsets in 2010, leaving it to evaporate in 2011 unless Congress acts to restore it. By then, the political and economic winds may have shifted, leading lawmakers to rescind the repeal and other parts of the tax cut. Opponents of the repeal have already vowed to wage a year-by-year fight against the phase-out of the estate tax , which wasn't a political slam-dunk to begin with because it benefits the rich.

Even the reduced rate of "45% is still way too high, and the exemption isn't large enough to pass on [a newspaper]," said Dave Lord, president of Pioneer Newspapers in Seattle, who has followed the repeal process.

Like others, Lord had hoped to save on tax insurance and consulting expenses. Now, he said, "I don't see significant savings at this point."

But Frank Blethen, publisher of The Seattle Times and longtime leader of a pro-repeal coalition, called the outcome a victory, considering the opposition: "The practical reality is the choices we had were this or nothing."

Blethen said while the bill does little in the short term, the estate- tax measure and the lobbying that preceded it provide a strong foundation for future efforts to further scale back the rates and raise the exemption level. …

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