Estate Tax Repeal Voted by House
The House voted to repeal the estate tax in the U.S. Don't expect this to move off the dime this year. Don't bet on it getting anywhere next year.
This issue keeps coming up and keeps getting tossed about. It's a real political football. The last go-round resulted in an increase in the amount an individual or couple could shelter from estate tax. The negotiation was so frazzled and haphazard that one year, 2013, there was no estate tax. (BTW, that was the year that George Steinbrenner died; his family therefore owed not federal estate tax on his share of the NY Yankees, an organization worth over $1 billion. But I digress.)
Expect the issue to become a political football as it has for decades.
The Republican side:
One change for the better in this go-round:
What's slipped through the cracks in this current discussion, though, is the insurance industry lobby. They've made hundreds of million selling life insurance to fund potential estate taxes due on death. They'll fight this latest effort, as they have all others, tooth and nail.
Warren Buffet will fight it too, along with his liberal super-rich friends. Yes, I realize that seems to negate the Democrat view. After all, if anyone's aristocracy, it's Buffet. But he's convinced a bunch of his rich friends that the estate tax is good for society. Setting aside the theoretical benefit of the federal government using such funds to benefit the needy, one has to ask how giving hundreds of million to a government that has spent itself to into financial oblivion makes any sense.
In any case, this isn't going anywhere this year. As they say when you're team fails to win, maybe next year.
This issue keeps coming up and keeps getting tossed about. It's a real political football. The last go-round resulted in an increase in the amount an individual or couple could shelter from estate tax. The negotiation was so frazzled and haphazard that one year, 2013, there was no estate tax. (BTW, that was the year that George Steinbrenner died; his family therefore owed not federal estate tax on his share of the NY Yankees, an organization worth over $1 billion. But I digress.)
Expect the issue to become a political football as it has for decades.
The Republican side:
“It penalizes those who have worked all their lives and reinvested in their family businesses,” said Representative Adrian M. Smith, a Nebraska Republican.The Democrat view:
“Republicans are helping the rich get richer,” said Representative Jim McDermott of Washington. “Repealing the estate tax will surely sow the seeds of a permanent aristocracy in this country.”Both segregate a slice of the issue to their best advantage. After all, it's politics.
One change for the better in this go-round:
Unlike previous versions, the bill passed by the House wouldn’t require heirs to pay capital gains taxes on the increased value of assets over the deceased’s life.That's always been the bugaboo in repealing the estate tax: heirs owing taxes on the capital gains on assets they inherit, not when they inherit them, but if and when they sell. You pay a gain over the purchase price, which could be pennies on the current value. You wouldn't get that "step-up" in the cost basis to the value on the date of death that currently you do get on inherited assets. This bill (which won't pass anyway) would retain the step-up and eliminate the estate tax.
What's slipped through the cracks in this current discussion, though, is the insurance industry lobby. They've made hundreds of million selling life insurance to fund potential estate taxes due on death. They'll fight this latest effort, as they have all others, tooth and nail.
Warren Buffet will fight it too, along with his liberal super-rich friends. Yes, I realize that seems to negate the Democrat view. After all, if anyone's aristocracy, it's Buffet. But he's convinced a bunch of his rich friends that the estate tax is good for society. Setting aside the theoretical benefit of the federal government using such funds to benefit the needy, one has to ask how giving hundreds of million to a government that has spent itself to into financial oblivion makes any sense.
In any case, this isn't going anywhere this year. As they say when you're team fails to win, maybe next year.
Comments