House Votes to Extend Death Tax

The House of Representatives voted to extend the estate tax, which was set to expire in 2010 as part of the Bush-era tax cuts. The Senate still has to approve an extension, an unlikely event before December 31, given that the Senate is pre-occupied with the health care reform issue. A likely alternative is that the Senate votes to temporarily extend the estate tax until it can take up debate on a permanent extension.

As presently written, the estate tax would have expired in 2010, only to be revived in 2011 at a higher rate, 55% instead of the current 45%. The House extension maintains the maximum rate at 45% and applies only to estates over $3.5 million.

Republicans are unanimous in their support of repealing the estate tax, which, they say, hurts small businesses such as farmers and car dealerships that have substantial assets that bump the value above the exemption limit. Maintaining the estate tax burdens the transer and, therefore, the viability, of family owned businesses from one generation to the next.