Just like President Obama’s repeated budget proposals that would decrease the federal estate tax exemption and increase the estate tax rate, the House-sponsored Death Tax Repeal Act (H.R. 2429) is like a broken record. Rumor has it that now that the House has garnered enough backers for H.R. 2429 to pass it (the bill currently has 221 co-sponsors, including three Democrats, which brings the total three above the number required for a House majority), supporters are pushing for a vote on the bill as early as September.
The name of the bill clearly states its purpose – to completely eliminate the federal estate tax (although getting rid of the “death tax” simply sounds more ominous, doesn’t it?). The generation-skipping transfer tax would disappear too, but the gift tax would remain with a $5 million lifetime exemption indexed for inflation and a 35% tax rate.
So why is this bill like a broken record? Because there have been dozens of bills introduced to repeal the federal estate tax since President George W. Bush was successful in doing it in 2001, although his repeal didn’t even go into effect until 2010 and the tax ended up being retroactively reinstated anyway. There is even a companion bill in the Senate, S. 1183, also called the Death Tax Repeal Act, which has 38 co-sponsors (all Republicans). The thought is if the House passes their death tax bill in September and the Republicans take the Senate in November, then the Senate will finally have enough votes to get a death tax repeal bill passed. Of course, even this happens – it won’t, but for the sake of argument, let’s assume it does – President Obama will veto the bill. End of story, back to square one, and the ballad of death tax repeal will continue to play on, just like a broken record.
- Axing estate tax gains momentum in House
- Obama’s 2015 Budget and Estate Planning – Everything Old is New Again
- What is the Future of the Federal Estate Tax in 2014 and Beyond?