DemocRAT's Lefty Betrayal! DemocRATs Vote to Protect Rich, Keep Estate Tax Low!
- From: Patriot Games <Patriot@xxxxxxxxxxx>
- Date: Thu, 03 Dec 2009 17:18:21 -0500
http://www.foxnews.com/politics/2009/12/03/house-votes-extend-tax-wealthy-estates-reduced-rate/?test=latestnews
December 03, 2009
House Votes to Extend Tax on Wealthy Estates at Reduced Rate
WASHINGTON -- The House voted Thursday to permanently extend a 45
percent inheritance tax on estates larger than $3.5 million, canceling
a one-year repeal of the tax set to begin next month.
A similar effort is afoot in the Senate, but the health care debate
there could preclude action on the estate tax before Congress breaks
later this month for holidays. There are also disagreements among
senators over the tax rate and the size of estates that should be
exempt, further clouding the bill's prospects.
Lawmakers, however, don't want to delay action until next year because
they are wary of enacting retroactive tax changes.
Under the House bill, estates smaller than $3.5 million would continue
to be exempt from the tax. Married couples, with a little estate
planning, could exempt a total of $7 million. That leaves less than 1
percent of all estates subject to the tax.
The bill passed by a 225-200 vote, with all Republicans opposed.
Majority Democrats argued that a permanent tax rate makes it easier
for families and small business owners to do estate planning, noting
that fewer than 1 percent of all estates are subject to the tax.
"In America, it's not a sin to be rich nor is it a crime to die rich,"
said Rep. Jared Polis, D-Colo. "This bill gives our nation's
wealthiest families the ability to know exactly what their obligation
to the nation that fostered their wealth will be, and it is fair and
it is just."
The bill follows the federal budget proposed by President Obama. But
many Republicans called for permanent repeal of the estate tax,
arguing it hurts families that pass down farms and small businesses to
their children.
"The majority claims to be offering certainty to taxpayers and I
suppose in a way they are -- they are certainly repealing the hope of
ever eliminating the death tax," said Rep. Dave Camp of Michigan, the
top Republican on the tax-writing House Ways and Means Committee.
Under current law, the federal estate tax is scheduled to temporarily
disappear next year before returning in 2011 at an even higher 55
percent rate. During the year without an estate tax, all estates would
be subject to a 15 percent capital gains tax that they now avoid.
"If Congress does not act on this issue this month, you would have a
wildly fluctuating scenario of different estate tax levels, making it
impossible for families to plan," said Rep. Earl Pomeroy, D-N.D.,
chief sponsor of the House bill.
Some liberals have complained that the bill is a giveaway to the rich
because it would result in lower rates in future years than what
current law provides. Conservatives have labeled the estate tax a
"death tax" and argue it should be repealed permanently.
"We're trying to forge a compromise that resolves this issue once and
for all," Pomeroy said.
Rep. Louie Gohmert, R-Texas, likened the estate tax to stealing from
the dead.
"After someone dies and someone comes in and steals from them, we
consider that in most society reprehensible," said Gohmert, a former
judge. "I have sentenced people personally to prison for doing that."
The quirk in the law, in which the estate tax would disappear for only
a year, came out of a series of tax cuts enacted in 2001. Many
Republicans, who controlled Congress at the time, wanted to
permanently repeal the estate tax then. But they settled on a gradual
reduction, with a one-year repeal, to reduce the impact on the federal
budget deficit.
Under current law, the estate tax would return in 2011 with a $1
million exemption and top rate of 55 percent, unless Congress acts.
Permanently extending the tax with a top rate of 45 percent on estates
larger than $3.5 million would raise about $14 billion a year.
However, it would raise less tax revenue than current law over the
next 10 years -- an estimated $234 billion less -- because the tax
rate would be lower in future years. The lost revenue would be covered
with increased borrowing.
Under current law, if someone inherits a $5 million estate in 2009,
they would pay $675,000 in federal estate taxes, according to an
analysis by Deloitte Tax. In 2010, they would pay no estate tax but
the estate would be subject to a 15 percent capital gains tax. If they
inherit the $5 million estate in 2011, they would pay $2,045,000 in
estate taxes, according to the analysis.
Under the House bill, they would pay $675,000 in estate taxes,
regardless of which year the estate is inherited.
Currently, the tax affects few estates. In 2009, about 5,500 estates
will be subject to the tax, according to projections from the Tax
Policy Center, a Washington think tank. That's 0.23 percent of all
estates.
.
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