H.R. 4853: More Drama

In the House, many Democrats said the bill is too generous to the rich, and both Democrats and Republicans 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 Pomeroy amendment would have set the personal estate tax exemption at $3.5 million and the top rate at 45%. The Pomeroy amendment also would have:

• Given 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.

House Speaker Nancy Pelosi, D-Calif., came to the floor to argue that Republicans have been holding provisions that could help most Americans hostage for the sake of passing provisions that would help the wealthiest 0.25% of taxpayers.

“That’s 6,600 wealthy families are holding up tax cuts for 155 million Americans,” Pelosi said. “We have to borrow the money from China and send the bill to our children and grandchildren. Is that fair?”

Pelosi, who with her husband is estimated to have a net worth over $15 million, apologized to Americans’ children, their grandchildren and the Chinese government for the cost of the bill.

Rep. Patrick Tiberi, R-Ohio, noted that he is the son of a steelworker and a seamstress who never graduated from high school and objected to the tenor of the debate. “The road to prosperity is not through class warfare,” Tiberi said. H.R. 4853 is not perfect, but it will help hold down taxes for working families and provide some certainty for owners of farms and businesses who are trying to plan for the future, Tiberi said. “Do we let the perfect be the enemy of the good?” Tiberi said.