Senate approves phase-out of estate tax

By Chelyen Davis
Free Lance-Star staff writer

RICHMOND--On a veto-proof vote of 31 to 8, the Senate approved a bill that would phase out the Virginia estate tax by 2005.

The House has already passed identical legislation.

Both bills were approved over the objections of most Democrats, who wanted to add some restrictions to the bill. The Democratic version would have exempted farmers and small business owners, and no one else, from the estate tax.

‘This is a bill that when it is enacted, will affect no more than 1,000 families, but it will take $135 million out of our general fund, money we cannot afford,’ said Sen. Creigh Deeds, D-Bath.

Sen. Leslie Byrne, D-Fairfax, said the Republican version of the bill tells Virginians that those who work for their money must pay taxes, while those lucky enough to inherit money won't be taxed on it.

‘Is this the message Virginia wants to send? That no matter how hard you work, we'll tax you. Unless you have a rich daddy,’ Byrne said.

Sen. Edd Houck, D-Spotsylvania, said he was going to vote for the bill. He said he had been approached about the bill by members of the Virginia Farm Bureau, who told him they had to sell part of the farms they inherited from their parents to pay the estate tax. Houck said former farm land is often bought by developers; eliminating the estate tax, he said, would help fight sprawl.

Sen. Charles Hawkins, R-Pittsylvania, said it would be patriotic to eliminate the estate tax.

‘This is about the American dream, keeping control of your own capital," Hawkins said. "This is as pro-American and pro-Virginian as anything I know.’

Warner has said he will not sign the estate tax bill if it arrives on his desk in its current form.

But Warner spokeswoman Ellen Qualls said the Senate vote yesterday--and the House's previous passage of the same legislation--is not a defeat for Warner.

‘We were never lobbying the estate tax,’ she said. ‘That is one of those issues that is a defining philosophical issue for people and the governor is choosing the side of not phasing out another tax when we haven't kept our promise to phase out the food tax and the car tax.’