WASHINGTON, April 16, 2015 – Brushing aside a veto threat, the Republican-controlled House voted 240-179 to repeal the federal estate tax.
The vote was largely symbolic, given the strong opposition from President Obama and congressional Democrats. Seven Democrats voted for repeal.
Rep. Kristi Noem, R-S.D., recounted how her family was forced to take out a loan to pay estate taxes when her father was killed in an accident in 1994.
“It’s one of the main reasons why I got involved in government and politics because I didn’t understand how bureaucrats and politicians in Washington, D.C., could make a law that says when a tragedy hits a family” the government is “owed something from that family business,” Noem said.
There is virtually no Democratic support in the Senate for repeal. The Senate last month approved a non-binding measure, 54-46, in favor of killing the tax, but only one Democrat supported it, Joe Manchin of West Virginia. One Republican, Susan Collins of Maine, in voting against the measure sponsored by John Thune, R-S.D.
The issue has been largely partisan since Congress, starting in 2010, raised the exemption to $5 million, indexed the limit to inflation and lowered the top tax rate. For 2015, the exemption is $5.43 million and the top tax rate is 40 percent. For years until 1997, the exemption was set at $600,000 and the top tax rate was 55 percent.
The White House cited the exemption in a Statement of Administration Policy threatening a veto of the House bill. More than 99 percent of Americans, “including virtually all small businesses and family farms, do not pay any estate tax,” according to the statement.
“Killing the estate tax would shift a greater share of the tax burden onto working Americans at a time when the top one percent already holds more than 40 percent of the Nation's wealth and wealth disparities have risen to levels not seen since the 1930s.”
The Joint Tax Committee estimated that repealing the tax would cost the government $269 billion in revenue over 10 years.
Noem said the lost revenue shouldn’t be the issue. “The government does not earn money. The government takes other people’s money is what it does.”
Three Republicans voted against repealing the tax.