Wow, they did it. The House really did vote on a federal estate tax bill. And it passed.
The vote was narrow and partisan: in the end, 225 for, 200 against (see how your Representative voted here).
The bill, HR 4154, was, as I blogged earlier, a compromise bill introduced by Rep Earl Pomeroy (D-ND) on November 19, 2009. The bill permanently extends the federal estate tax at a top rate of 45% (down from the sunset rate of 55%) and freezes the individual exemption at $3.5 million (or $7 million for married taxpayers).
The result is that, statistically, more than 99% of estates would be exempt from the federal estate tax. Less taxpayers paying in at lower rates means that the Treasury is expected to take a hit. The cost of the bill is estimated to be $237 billion since it actually decreased revenue compared to the current scheme.
A motion to eliminate the tax for 2010 and 2011 but allow it to return in 2012 thankfully failed. Don’t even get me started on what a disaster that would have been…
The ill-considered carryover basis rules for capital gains during the “repeal” in 2010 were also eliminated as part of the bill.
But don’t get too excited. This is just the news from the House. We still have the Senate to go – and just a few days left in the year. Hopefully, they’ll exercise a little common sense and get something done. Retroactive legislation is rarely a good idea.
In reality, not “soak-the-rich” la la land, repealing the Estate Tax would create over 1.5 Million jobs. Repealing the Estate Tax would allow small farmers, small ranchers, and small businesses to stay in business and continue to contribute to the economy. Repealing the Estate Tax would deprive big life insurance companies like AIG of at least $12 Billion a year from the premiums they collect off their so-called second to die policies. That money would be put to better uses in the economy.
The Estate Tax is a farce. It produces less than 1% of the federal budget, it destroys jobs and small businesses.
Get the facts at http://www.estatetaxtruth.org