On a vote of 225-200, the House of Representatives passed a freeze of the estate tax at 2009 levels. This is a long-term tax cut for super-wealthy families that will cost the federal government $230 billion dollars over ten years.
As I mentioned earlier this week, the bill would get rid of the one-year repeal of the estate tax in 2010, keeping the 2009 numbers in place, with a 45% tax on inheritances, exempted for the first $3.5 million of income. However, this is a reduction in the estate tax from the level that it was before George Bush passed through with the 2001 tax cuts. By doing nothing, the one-year repeal would have been replaced with a reverting back to the original estate tax, with a 55% tax on inheritances, exempted for the first $1 million of income. As a result, the net loss to the government would be $230 billion over ten years, despite the fact that this looks like a tax increase in the first year.
Every Republican voted against this despite the overall tax cut, because of the one-year increase.
Groups like the American Enterprise Institute are salivating over giving $230 billion to the super-wealthy – and making it look like a tax increase, besides! The same lame responses about how family farmers would suffer under the old estate tax – despite nobody ever being found for whom that is the case – predominate. Here’s a representative sample.