An estate tax proposal to set the personal exemption at $3.5 million for 2 years and the maximum rate at 45% is likely to come to the House floor today.
The House Rules Committee agreed Wednesday on House Resolution 1766, a measure that sets the rules for consideration of H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, on the House floor. Debate could occur this afternoon, and a vote could occur this evening.
But, since we posted the first version of this story, House Democrats who oppose the version of the bill passed by the Senate apparently have been battling with Senate version supporters off the House floor.
Some House Democrats have mentioned the turmoil while speaking in support of other bills, such as patent system improvement bills, that are being handled on through a system that suspends the usual procedural rules for uncontroversial measures.
Members of the Senate voted 81-19 to pass H.R. 4853, which would preserve extended unemployment insurance benefits for 13 months and extend many of the tax breaks in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) for 2 years.
In the House, many Democrats say the bill is too generous to the rich, and both Democrats and Republicans have argued that the bill would do too much to increase the budget deficit. For many Democrats, the estate tax provision has been especially troubling.
EGTRRA called for the estate tax to disappear this year and spring back to 2001 levels, with a $1 million personal exemption and a 55% top tax rate, in 2011. H.R. 4853, a measure negotiated by Obama administration officials and Republican congressional leaders, would set the personal exemption at $5 million and the top rate at 35%.
The House resolution governing consideration of H.R. 4853 by the House provides for 3 hours of debate.
In addition to setting the personal exemption at $3.5 million and the top rate at 45%, House Rules Committee officials say the estate tax amendment, offered by Rep. Earl Pomeroy, D-N.D., would:
- Give estates from decedents in 2010 the ability to elect to be treated under the 2009 levels or to be treated under current law for tax purposes. This election would let estates receive a step up in basis on inherited property rather than the 2010 carryover basis rules.
- Affect about 6,600 estates in 2011.
- Cost the government about $23 billion less than the estate tax provision in the bill passed by the Senate.
The Senate does not have much time left to consider bills, and H.R. 4853 watchers are not sure whether supporters of the bill could get an amended version back through the Senate.