Negotiations to handle negotiations to repeal or restructure the estate tax are on tap in Washington.

Senate Minority Leader Harry Reid (D-Nev.) has tapped Sen. Chuck Schumer (D-N.Y.), the chairman of the Democratic Senatorial Campaign Committee, to handle negotiations to repeal or restructure the estate tax, according to Senate sources.

The appointment appears to increase significantly the chances of reaching a deal on what critics call the death tax and may inoculate Democrats from future political attacks on what has been a tough issue for them in rural and swing states.

Schumer has said that he supports a repeal of the tax on all family-owned businesses passed from one generation to the next. . . .

The estate or death tax has been a nettlesome issue politically for Democrats in rural and conservative states. The national and local Republican parties in South Dakota and Georgia used the issue against former Sens. Tom Daschle (D-S.D.) and Max Cleland (D-Ga.), who lost their bids for reelection in 2002 and 2004, respectively.

Reaching a deal with Republicans on a tax exemption for family-owned businesses of any side could take the issue off the table in 2006, which may be why Schumer, the DSCC chairman, is leading the effort. He is also a new member of the Senate Finance Committee.

(4-6-05, The Hill.)
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I might do a background post in the future on this area of tax law. There is an issue that lurks with any complete killing of the estate tax -- carryover basis -- that I might address.