WASHINGTON, DC – House Democratic Whip Steny H. Hoyer (MD) made the following statement today on the floor of the House of Representatives regarding the Republican Estate Tax Bill and the Democratic Alternative:
“Mr. Speaker, let’s be absolutely crystal clear: This Republican bill is nothing but a tax increase in disguise. It would raise taxes for thousands of families, farms and small businesses. There are no two ways about it.
“For years, House Republicans have proclaimed that the elimination of the inheritance tax – a tax first proposed by Republican Theodore Roosevelt in 1906 – was intended to “save” family farms and small businesses. But today, according to the Department of Agriculture, more farm estates would have increased tax liability from the “carry-over” basis rules in this bill than would benefit from repeal of the inheritance tax.
“That’s right, Mr. Speaker. Under current law, the Joint Economic Committee estimates that only 7,500 estates nationwide would have any estate tax liability in 2009. However, the permanent switch to “carry-over” basis rules – rules that are used to calculate capital gains – would impact an estimated 71,000 estates. And many of those estates would face capital gains tax increases.
“Now, even as this bill increases the capital gains tax on many farm estates and small businesses, it still adheres to what seems to be the Republican Party’s core economic principle – fiscal irresponsibility, an unwillingness to face fiscal reality.
“At a time of record budget deficits of nearly half a trillion dollars a year, this Republican bill would cost nearly $1 trillion over the first ten years of full repeal. It would irresponsibly drive our nation even further into debt, and immorally force our children to pay our bills.
“In sharp contrast, the substitute offered by Mr. Pomeroy is a simpler and more responsible solution over the long term. The Pomeroy substitute – which costs less than one-third of this Republican bill – would permanently increase the current exclusion amounts to $3.5 million per individual ($7 million per couple) in 2009, and as a result exempt 99.7 percent of all estates from estate tax liability. I urge my colleagues: Vote for the Pomeroy substitute.”