WASHINGTON – April 17, 2015 – (RealEstateRama) — The House voted to repeal the 99-year-old U.S. estate tax amid a partisan clash over whether the government should break up concentrated wealth or make it easier to pass along assets to the next generation.
The House passed the bill 240-179 Thursday. The tally was mostly along party lines; seven Democrats voted for passage and three Republicans voted no.
For Maine’s representatives, Republican Bruce Poliquin voted yes and Democrat Chellie Pingree voted no.
The measure would make it possible for the wealthiest Americans to do what the other 99.8 percent already can do – pass their assets to their children without a federal estate tax. The measure would save taxpayers – and cost the U.S. government – $269 billion over a decade.
“It is, at its heart, an immoral tax,” said Rep. Kevin Brady, a Texas Republican.
The measure probably won’t advance further, at least not this year. A Senate test vote last month came up six votes short of the 60 needed to overcome a Democratic filibuster. President Barack Obama has threatened to veto the bill, noting that the Republican budget plan adopted by the House in March relies on revenue from the estate tax.
The tax – which Republicans have dubbed the “death tax” – evokes strong opinions on both sides of the aisle, which were evident during floor debate on the measure.
Republicans say taxing estates upon death punishes success, imposes double taxation and hurts family-owned businesses. They maintain that it’s particularly damaging to farmers who are asset-rich and cash-poor and entrepreneurs from minority groups with first-generation wealth.
“It penalizes those who have worked all their lives and reinvested in their family businesses,” said Rep. Adrian M. Smith, a Nebraska Republican.
A study by the congressional Joint Committee on Taxation found that 89 percent of estates with farm property in 2011 were “well-funded,” or had enough liquid assets to pay the estate tax, mortgages and liens. Among taxable estates with farm property, 77 percent were well-funded.
Democrats said Republicans were handing a tax break worth billions of dollars to just a few households and pointed to existing rules that give farms and businesses up to 15 years to pay the tax.