I want to provide you with a brief update on repeal of the Estate Tax. It appears House action on legislation to extend the Bush tax cuts has been moved up and will now take place this afternoon. Legislation that sets the parameters for fundamental tax reform will be voted on tomorrow.
The rule approved last night by the House Rules Committee determines the following: The bill that will come up today is H.R. 8, the Job Protection and Recession Prevention Act, introduced by Rep. Dave Camp (R-Mich.). H.R. 8 would extend the Bush Tax cuts for one year. Under the bill, the estate tax exemption would remain at $5 million per person, indexed for inflation. The top rate would be 35 percent, and the spousal transfer would continue. As you know MRAA supports repeal of the Estate Tax and maintenance of the Bush Tax cuts.
A Democratic substitute bill was offered at Rules by Rep. Carl Levin (D-Mich.). The Levin alternative is the same bill passed by the Senate last week that only extended lower taxes for couples making less than $250,000 and for individuals making less than $200,000. The Levin Bill is silent on estate taxes, which means the exemption would shrink to $1 million on January 1 and the top tax rate would rise to 55 percent.
In a statement of administrative policy issued on July 31, the Obama Administration opposed the passage of H.R. 8.
Tomorrow the House will consider H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act, which will set a timeline for action on fundamental tax reform in 2013. Legislation would be introduced in April with House floor action in June. A democratic substitute will outline Democratic principles of tax reform.