The House is gearing up to vote Thursday on repealing the estate tax, an issue that has energized the base in both parties — and that Democrats and Republicans see as a political winner.
Republicans are making the vote the centerpiece of their agenda during a week when millions of taxpayers face the annual IRS filing deadline and anti-tax groups regularly hold protests.
For the GOP, repealing the estate tax — or the “death tax,” as they’ve long called it — is more than just a proposal favored by their supporters in the business community.
Republican leaders insist it’s patently unfair that people pay taxes as they accumulate wealth through the years, only for their heirs to pay additional taxes on that wealth after they die.
House Majority Whip Steve Scalise (R-La.) said Tuesday that it is “morally wrong” for a family’s toughest decision after a death to be figuring out the next steps for their business. “That’s not supposed to be something people have to deal with when they’re grieving for the loss of a loved one,” he told reporters.
Republicans believe that voters agree with them on that point, even as polls have long suggested that most people believe the wealthiest Americans don’t pay enough in taxes.
For their part, Democrats are just as excited for Thursday’s vote. After all, President Obama won his second term in 2012 after explicitly campaigning for higher taxes on the wealthy.
And Democrats say they’re more than happy to have a debate over a repeal proposal that would add $270 billion to the federal debt over a decade, according to the Congressional Budget Office, while affecting only a small fraction of estates in the U.S.
“I guess when it comes to helping the wealthiest people in the country, it’s never enough,” Sen. Debbie StabenowDeborah (Debbie) Ann StabenowSanders says spending plan should be .5T 'at the very least' Senators call on Taiwan for aid in automotive chip shortage Photos of the Week: Infrastructure vote, India floods and a bear MORE (D-Mich.) said Tuesday with a laugh.
House GOP leaders have noted that many of their rank and file have never gotten the chance to vote on estate tax repeal, with the chamber last voting on the issue a decade ago.
Still, the estate tax proposal is unlikely to make it through the Senate, let alone past a presidential veto. Just 54 senators backed a nonbinding repeal proposal last month, six short of the 60 generally needed for legislation to move forward.
But this week’s vote also illustrates how deeply divided Republicans and Democrats are when it comes to taxing individuals, even as Obama and GOP tax writers have pledged to work together on a tax reform plan for businesses.
Just one House Democrat, Rep. Sanford Bishop (Ga.), has signed on to the estate tax repeal bill, and one Senate Democrat, Sen. Joe ManchinJoe ManchinBriahna Joy Gray: Push toward major social spending amid pandemic was 'short-lived' Overnight Energy & Environment — Presented by Climate Power — Emissions heading toward pre-pandemic levels Biden discusses agenda with Schumer, Pelosi ahead of pivotal week MORE (W.Va.), joined the GOP in the nonbinding repeal vote.
And the messaging from the two parties in recent weeks suggests that both sides could continue to hammer the issue ahead of a 2016 campaign.
Under current law, the Joint Committee on Taxation estimates that 5,400 estates will have to deal with the tax over the next several years, out of the well over 2 million deaths that occur annually.
That’s because individuals with estates valued at less than $5.43 million this year, and married couples with estates worth less than $10.86 million, are exempt. The 2013 “fiscal cliff” deal set the current parameters, which also include a 40 percent rate and linking the exemption parameters to inflation.
Obama and other senior Democrats want to expand the tax, hitting more estates with a higher top rate. White House officials have gone out of their way this week to point out that the president’s proposals to give tax breaks for child care and education and to two-earner families would help far more people than the GOP’s estate tax repeal.
On Tuesday, the administration threatened to veto the House measure, calling it even more extreme than a temporary repeal of the estate tax passed early in George W. Bush’s administration. The White House also noted that the House GOP’s recently passed budget relied on revenues from the estate tax, and that the Republican proposal would also save heirs from capital gains taxes on their relative’s assets.
Obama himself got into the action this month, calling out the estate tax repeal proposal in Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnell'Justice for J6' rally puts GOP in awkward spot Republicans keep distance from 'Justice for J6' rally House to act on debt ceiling next week MORE’s back yard of Louisville, Ky.
“That’s fewer than 50 people here in Kentucky who would on average get a couple million dollars in tax breaks,” Obama said. “For that amount of money, we can provide thousands of people the kind of training they need.”
But Republicans like Rep. Kevin BradyKevin Patrick BradyHouse panel advances key portion of Democrats' .5T bill LIVE COVERAGE: Ways and Means to conclude work on .5T package LIVE COVERAGE: Tax hikes take center stage in Ways and Means markup MORE (Texas) and Sen. John ThuneJohn Randolph ThuneManchin keeps Washington guessing on what he wants Manchin-McConnell meet amid new voting rights push Republican leaders misjudged Jan. 6 committee MORE (S.D.), the sponsors of the repeal proposals, say they don’t believe Democrats will be as successful with that sort of rhetoric this time around.
Brady argued Tuesday that the wealthiest of the wealthy are often able to avoid paying the tax through the use of complicated estate planning.
Republicans also maintain that many of the heirs that get hit by the estate tax own family farms, ranches or businesses that might sit on valuable land but find it difficult to come up with the cash to pay the estate tax. That’s especially the case, Brady said, for minority- and women-owned businesses.
“This is an attack on success,” Brady said.