Thursday, December 16, 2010
H.R. 4853 AS AMENDED BY THE SENATE FACES AMENDMENT IN THE HOUSE ON THE ISSUE OF THE FAT CAT ESTATE TAX BOONDOGGLE
H.R. 4853, the Middle Class Tax Relief Act, sailed through the Senate after Congressional Republicans struck a deal with the President assuring the FAT CAT TAX BOONDOGGLE would not go quietly into that night of nights. Yesterday the Rules Committee issued H. Res. 1766, accompanied by Report Number 111-682, which, inter alia, summarizes H. Res. 1766.
The Resolution provides for consideration of the Senate Amendment to the House Amendment to the Senate Amendment to the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, as H.R. 4853 is now being called.
The Chairman and Ranking Member of the House Ways and Means Committee will control the equally divided three hours of debate of the bill on the House floor.
The Resolution makes in order a motion to be offered by the Chairman of the House Ways and Means Committee that the House concur in the Senate Amendment to H.R. 4853, as passed by the House on December 2nd. That was Roll Call Number 604 when the House agreed with an amendment to the Senate amendment. That's why you are now getting the strange legislative lingo of considering a Senate Amendment to a House Amendment to a Senate Amendment. H.R. 4853 has become a proverbial ping pong ball being bounced and amended between the chambers.
This Rule did not sail smoothly through the Rules Committee. California's Republican Representative wanted to make all submitted amendments open to debate on the floor. That failed on Rules Committee Record Vote 516. Next up was Indiana's Republican Representative Mike Pence who wanted to MAKE PERMANENT the FAT CAT TAX BOONDOGGLE. The Pence Amendment was introduced by North Carolina's Republican Representative Dr. Foxx. That failed by on Rules Committee Record Vote 517. Here is your barometer forecasting Republican Tax Policy in the 112th Congress. Mr. President, make ready your veto pen!
The House Amendment, proffered by North Dakota's Democratic Representative Earl Pomeroy takes aim at the two-year extension of the 2009 estate tax law. The amendment strikes Title III of the Senate Amendment to H.R. 4853 and amends the bill to provide two years of estate tax relief at 2009 levels. In calendar years 2011 and 2012 the estate tax exemption amount would be $3.5 million ($7 million for a married couple) and the maximum tax rate on estates would be 45%.
The Amendment provides estates from decedents in 2010 with the option to elect treatment under the 2009 levels or under current law for tax purposes. This was the taxpayer can look at the provisions of the tax code which treats them most favorably and lets them make a choice. This election allows estates to receive a step up in basis on inherited property rather than the 2010 carryover basis rules. A step up in basis is preferred when minimizing tax liability.
The exemption level and rate are consistent with the estate tax proposal included in the President's FY2010 and FY2011 budgets. Under the Senate Amendment to H.R. 4853, the bill provides two years of estate tax relief with a $5 million estate tax exemption ($10 million for married couples) and a maximum rate of 35%. This Amendment saves $23 billion and affects a mere 6,600 estates in 2011. These 6,600 estates would receive an average additional tax cut of more than $1.5 million each under the Senate bill.
Report Number 111-682 containing the language of the House Amendment to the Senate Amendment to the House Amendment of H.R. 4853 can be found online at: http://www.rules.house.gov/111/RuleRpt/111_satohatosatohr4853_rpt.pdf.