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December 4, 2009 in Nation/World
House votes to extend estate tax
WASHINGTON – The House voted Thursday to extend indefinitely 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.
The bill follows the federal budget proposed by President Barack 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.
© Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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