The House of Representatives voted 272-162 to permanently repeal estate taxes beginning in 2011, when the current law that temporarily phases out estate taxes expires.
House members on Wednesday approved H.R. 8, the Permanent Estate Tax Repeal Act of 2005, after easily killing a Democratic compromise.
The bill, which has the support of the White House, would eliminate the current step-up in basis from date of death, beginning in 2010, and substitute a carryover basis, with the result that beneficiaries who eventually sell a business that they inherit would be subject to capital gains tax on increase in value before, as well as after, death.
Dena Battle, manager of legislative affairs for the National Federation of Independent Business, lauded the House vote. "It was the strongest vote for repeal we've had so far, both as to the total number and the number of Democrats who support it," Battle said. "Now it's time for the Senate to just get it done."
However, most of the bills currently pending in the Senate would aim toward a compromise rather than full repeal, according to former tax counsel to the Senate Finance Committee George Pieler. "The House did the right thing and the Senate should do the same," Pieler said. "The compromise bills would resurrect rather than repeal the death tax. They should resist the temptation to cut a deal just to get over the issue. It's better to keep fighting for full repeal."
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