(Bloomberg) — The 99-year-old U.S. estate tax would disappear under a bill approved Wednesday by the
The legislation, backed on a 22-10 party-line vote, would benefit about 5,500 families who pay the tax each year plus thousands of others who organize their finances to avoid the 40% tax on estates upon death. It would deprive the U.S. government of
The measure stands almost no chance of becoming law under President
“This tax doesn’t just hit the big guy,” said committee Chairman
Republicans have come close to repealing the estate tax twice in the past 15 years. In 2000, President
In 2001, President
The tax now applies to estates worth more than
Only about 0.2% of the estates of people who die pay the tax, down from 2.16% in 2000 and 6.47% in 1973, according to the congressional
Democrats said the tax combats wealth inequality and described the Republican bill as a gift to the wealthiest American families.
“You cannot call 23,000 acres a family farm,” McDermott said.
The House Republican budget proposal assumes revenue from the estate tax to meet its goal of balancing within a decade. The bill approved by the committee Wednesday doesn’t replace the money that would be lost by repealing the tax.
The bill, sponsored by
Under that version, heirs inherited the cost basis of assets. For example, consider someone who bought stock for
Under Brady’s bill, the heirs would owe capital gains taxes only on the amount exceeding
Obama, by contrast, in January proposed imposing a capital gains tax on the
Brady’s bill would still impose a gift tax on transfers made during one’s lifetime. The existing
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