House Passes a Permanent Lower Estate Tax RateDecember 3, 2009 - by Donny Shaw
The House of Representatives voted today to make permanent the 2010 estate tax level of 45 percent, with the first $3.5 million of taxable assets per estate being tax exempt. Under a bill signed into law by President Bush, the rate is scheduled to go to zero in 2010 and then go up in 2011 to 55 percent with only the first $675,000 being exempt.
The permanent estate tax bill passed today has been estimated to cost the government $234 billion over 10 years and is not offset with new revenues. Upon passage, House Speaker Rep. Nancy Pelos i [D, CA-8] said that the bill is “founded on the ideas of equality and opportunity – on values that form the foundation of our economic growth and our pursuit of the common good.” See this previous blog post for more info on estate tax rates.
The bill to maintain the lower rate (H.R. 4145) passed the House this afternoon on a vote of 225-220. Every single Republican voted against the bill. They’re philosophically opposed to the whole idea of taxing inherited estates and generally attack it as a “death tax.” Twenty-six Democrats — a thorough mix of progressives and moderates — voted with Republicans against it.
The bill now has to pass the Senate, where its fate is uncertain. In April, the Senate voted favorably on an amendment to the budget resolution from Sen. Blanche Lincoln [D, AR] to lower the estate tax rate to 35% and raising the exemption to $5 million.