The Senate is expected to vote this week on permanent repeal of the estate tax, the Associated Press reports.

The tax, which has been steadily reduced since the first of President Bush's tax cuts was passed in 2001, will be phased out completely by 2010. Without action by Congress, however, it will be reinstated in 2011, with the top rate on estates reverting to 55 percent and the amount exempted from the tax shrinking to $675,000, from the current $1.5 million.

Groups representing family-owned businesses have pushed since 2001 to make full repeal of the tax permanent — a victory they've won in the House but have fallen short of achieving in the Senate. Undeterred by the standoff, supporters of permanent repeal are pressing Senate Republican leaders for a vote before Congress adjourns for its August recess. "We really see this as a unique opportunity to get one last push for full, permanent repeal," Ryan Peebles, a lobbyist for the National Federation of Independent Business, told the Cincinnati Business Journal.

Still, in an era of persistent budget deficits, and with many senators leery of repealing a tax that generated $25 billion in revenue in 2004, estate tax opponents may have to settle for lower rates and higher exemptions. In fact, Senate Republicans have floated a compromise that would reduce the effective rate on estates — currently 47 percent — to 15 percent.

For their part, opponents of repeal argue that doing away with the tax would shift the burden of replacing the lost revenue from the wealthiest 1 percent of Americans to the general population and could lead to a sharp decline in charitable giving. "This is really going to be a gut check for fiscally responsible senators," said Gene Sperling, senior fellow for the Center for American Progress and a former economic adviser to President Clinton. "Way too many senators," he added, are focused more "on three wealthy donors they've met" than on "the millions of constituents who will pay higher debt or get less Medicaid or Social Security benefits" if the tax is repealed.