The House voted last week to repeal the estate tax, a longtime priority of Republicans that also spurred Democratic charges that the GOP is in the pockets of the rich. The 240-179 vote broke down largely on partisan lines, with seven Democrats voting to repeal the estate tax and three Republicans voting against it. The White House has threatened to veto the measure, and the bill does not appear to have the 60 votes necessary to break a Democratic filibuster and get through the Senate. GOP leaders pushed ahead with Thursdayâ€™s vote, timed to coincide with this weekâ€™s tax filing deadline, in part to give their rank and file the opportunity to vote on repeal.
The House last voted to end the estate tax 10 years ago, which means that the vast majority of Republicans never had the opportunity to stand up for small businesses who are threatened by the death tax every day, said a Republican quoted in The Hillâ€™s article titledâ€œHouse votes to repeal estate tax.â€
Senator John Thune (R-SD) introduced legislation to repeal the estate tax, but itâ€™s uncertain when or if that proposal might get a vote. There were 54 senators who supported the estate tax repeal last month in a non-binding budget resolution vote. Nonetheless, this is six votes short of the 60 needed.
The article notes that a repeal of the estate tax would increase the deficit by $269 billion over the next 10 years, and the Joint Committee on Taxation projects that the estate tax will impact 5,400 estates in 2015. This is approximately 0.2% of the 2.6 million deaths expected in the U.S. this year.
Under current law, individuals with estates of under $5.43 million in the year 2015 (and couples with $10.86 million estates) are exempt from paying the estate tax of 40% on the amount of assets above that threshold.
The article says that Republicans think they have a strong argument for repealing what they believe is â€œan immoral tax that resonates with voters across the economic spectrum.â€ The GOP claims that people are taxed every step along the way as they accumulate assetsâ€”as a result, their heirs shouldnâ€™t have to worry about the estate tax when they die. In addition, the estate tax is more likely to hit family farms and small businesses than the ultra-wealthy who can afford complex estate planning. But, as one might guess, the Democrats see this differently and see the vote as another way to portray the Republicans as the party of tax cuts for the rich.
For more information on this and other elder law and estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.