Axing estate tax gains momentum in House

Bringing bill to a floor vote expected for political gain if not for ultimate passage into law

Jul 22, 2014 @ 2:18 pm

By Mark Schoeff Jr.

Incoming House Majority Leader Kevin McCarthy, R-Calif.
+ Zoom
Incoming House Majority Leader Kevin McCarthy, R-Calif. (Bloomberg News)

Backers of a bill that would eliminate the estate tax are pushing for a vote in September now that they have achieved enough supporters to exceed a House majority.

The measure, which ends inheritance and generation-skipping transfer taxes, has 221 co-sponsors, or three more than needed for a House majority. The legislation also would make permanent a 35% gift-tax rate with a $5 million lifetime exclusion.

Palmer Schoening, executive director of the Family Business Coalition, said a House floor vote had been scheduled earlier this summer but was postponed after House Majority Leader Eric Cantor, R-Va., lost a primary election in June.

The groups pushing the bill are now urging incoming House Majority Leader Kevin McCarthy, R-Calif., to put the measure on the House's fall agenda.

“We feel really good for a September vote,” Mr. Schoening said.

A spokesman for Mr. McCarthy did not respond to a request for comment.

Momentum for the estate-tax bill comes in part from House members who are running for the Senate in Arkansas, Oklahoma and Colorado, among other states, who want to showcase the vote.

“There are a number of members who are motivated to get this vote for political reasons,” Mr. Schoening said. “It's the most popular bill in the Republican conference right now.”

Its lasting impact is less certain. Even if the Republican-majority House approves the bill, it is not likely to be addressed by the Democratic-led Senate before the end of the congressional term in December. Any bills that fail to get full congressional approval have to be re-introduced in 2015.

But moving the bill through the House now will position estate-tax reform for later debate on broader overhaul.

“It shows that when tax reform gets going in earnest, this is an important issue to a lot of members,” said Marc Gerson, a partner at Miller & Chevalier and a former Republican tax counsel on the House Ways and Means Committee.

It may take another election, one that changes the party in the White House, to end the estate tax. If Republicans take control of the Senate — where an estate-tax bill has 37 co-sponsors — this fall, the party still faces a veto from President Barack Obama over the next two years.

In his fiscal 2015 budget, Mr. Obama proposed a top estate and gift tax rate of 45% with a $3.5 million individual exclusion for estates and a $1 million exclusion for gifts. Currently, estates are taxed at a 40% rate with a $5.3 million individual exclusion that is indexed for inflation.

Many Democrats oppose reducing or eliminating the estate tax because they say it mainly benefits the rich.

“In an environment where there's a concern about income and wealthy inequality, I don't see a strong likelihood of passing an estate-tax bill until 2017 at the earliest, if at all,” said Suzanne Shier, chief tax strategist and wealth planning practice executive at The Northern Trust Co.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

DOL fiduciary rule opponents and supporters sound off on Jan. 1 deadline

Senior reporter Mark Schoeff Jr. and managing editor Christina Nelson discuss the latest batch of comment letters on the regulation, this round focused on timing of the full implementation date.

Latest news & opinion

Will Jeffrey Gundlach's Trump-like approach on Twitter work in financial services?

The DoubleLine CEO's attacks on Wall Street Journal reporters is igniting a discussion on what's fair game on social media.

Fidelity wins arb case against wine mogul but earns a rebuke from Finra

In the case of investor Peter Deutsch, Fidelity doesn't have to pay any compensation, but regulator said firm put its interests ahead of his.

Plaintiffs win in Tibble vs. Edison 401(k) fee case

After a decade of activity around the lawsuit, including a hearing before the U.S. Supreme Court, judge rules a prudent fiduciary would have invested in institutional shares.

Advisers get more breathing room to make Form ADV changes

RIAs can enter '0' in some new parts of the document before their annual filing next year.

Since banking scandal, Wells Fargo advisers with more than $19.2 billion leave firm

Despite a trying year, the firm has said it will sweeten signing bonuses for veteran advisers.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print