House votes to make current estate tax permanent
WASHINGTON (Dec. 4, 2009) — By a 225-200 vote, the U.S. House of Representatives has voted to make permanent the current estate tax rate of 45 percent on individual estates worth more than $3.5 million for individuals or $7 million for married couples.
Under the current law, the federal government has phased in gradual reductions in the estate tax, with total repeal in 2010. However, the repeal would sunset in 2011, bringing the tax back to the old, pre-2001 rate of 55 percent on estates worth more than $1 million.
Small business groups such as the Tire Industry Association (TIA) have long favored total repeal of the estate tax, saying it is the only way to ensure small businesspersons won’t have to sell off their inheritance simply to pay the tax. Other groups, however, insist an estate tax repeal would cost the federal government too much money at a time it can ill afford the loss of revenue, and also that the tax’s danger to small business is exaggerated.
Paul Fiore, TIA director of government and business affairs, said the association is encouraged by the House vote. However, he said, TIA hopes for quick congressional passage of the proposal by Sens. Blanche Lincoln, D-Ark., and Jon Kyl, R-Ariz., to permanently raise the estate tax exemption to $10 million per couple and reduce the top tax rate to 35 percent.
