House may amend estate tax provision: Hoyer

House may amend estate tax provision: Hoyer
House Democrats may try to amend the estate tax provision of a bill that would extend Bush administration tax cuts for all income levels after the Senate acts on the measure early this week.
DEC 15, 2010
House Democrats may try to amend the estate tax provision of a bill that would extend Bush administration tax cuts for all income levels after the Senate acts on the measure early this week. “I expect there to be some consideration of that,” House Majority Leader Steny Hoyer, D-Md., said during a media event Monday at the National Press Club in Washington. At the same time, Mr. Hoyer didn't express any desire on the part of his colleagues to scuttle the bill, which will receive a crucial procedural vote in the Senate on Monday afternoon. Continuing tax cuts for individuals who earn less than $200,000 and families that make less than $250,000 is a priority for Democrats. “I think we're going to have a vote on the Senate bill, with possible changes,” Mr. Hoyer said. He conveyed the uneasiness that many of his colleagues have about the estate tax portion of the $857 billion bill that would extend for two years the reduction in marginal tax rates — and a raft of other tax breaks — implemented in 2001 and 2003. Under the bill, the estate tax would be set at 35% with a $5 million exemption. It also would reinstate the “step-up” in basis calculation for inherited property in which heirs could claim fair market value at the time of a relative's death. That approach reflects a bill sponsored by Sens. Jon Kyl, R-Ariz., and Blanche Lincoln, D-Ark. Mr. Kyl was one of the GOP members who negotiated with the White House. The House in 2009 approved an estate tax rate of 45% with a $3.5 million exemption. If Congress does not act by Dec. 31, the estate tax rate will zoom to 55% with a $1 million exemption, while marginal tax rates will return to their higher late-1990s levels. Mr. Hoyer noted that the House-passed estate tax level has languished in the Senate for a year. His colleagues may try to amend the Senate version of the tax cut bill to make the estate tax provision more palatable to the left, which views it as a giveaway to the wealthy which will exacerbate the federal deficit and debt. There “certainly seems to be some room for changes,” Mr. Hoyer said. The approach the House takes will be influenced by a procedural vote in the Senate on Monday. If there's overwhelming support to move to a final vote (i.e., to break a filibuster), it might limit the House's latitude to change the bill. Any revisions would have to go back to the Senate for another vote. Both chambers are trying to wrap up their lame-duck session by Friday. Mr. Hoyer said that the House Rules Committee or its tax-writing Ways and Means Committee might try to revise the Senate bill. “If they do so, we'll have votes on those amendments,” Mr. Hoyer said. The votes might turn out to be a way for House Democrats to vent their spleen about the estate tax. Approving amendments, however, would be difficult. If all 179 House Republicans stay unified, it would take less than a majority of Democrats to approve the bill. The chances of the bill's failing in the House look slim. “Increasing the tax burden on working families will not be helpful in continuing to grow the economy,” Mr. Hoyer said. “In order not to see that happen, you have to get a bill through Congress and signed by the president.” The product of an agreement between the Obama administration and Capitol Hill Republicans, the legislation also would provide a 13-month extension of unemployment benefits, a 2% cut in payroll taxes for workers in 2011 and many other provisions designed to stimulate the economy. It would maintain a 15% tax rate for capital gains and dividends. --Bloomberg

Latest News

Carson, Lido strengthen RIA networks with bicoastal deals
Carson, Lido strengthen RIA networks with bicoastal deals

Carson is expanding one of its relationships in Florida while Lido Advisors adds an $870 million practice in Silicon Valley.

Goldman gets shareholder backing on $80M executive bonus packages
Goldman gets shareholder backing on $80M executive bonus packages

The approval of the pay proposal, which handsomely compensates its CEO and president, bolsters claims that big payouts are a must in the war to retain leadership.

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a husband-wife tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.