This vote was on an amendment by Blanche Lincoln, D-Ark., that would allow for future legislation that would establish an estate tax exemption level of $5 million indexed for inflation. The amendment also would set the maximum estate tax rate at 35 percent, and make some other changes to existing law. The amendment was offered was offered to the budget resolution that serves as the blueprint for Congress’ budget priorities in fiscal 2010. The budget resolution sets overall spending targets for the Appropriations committees and outlines other budget rules.
The estate tax is the tax charged on property that’s willed to someone upon their death (hence why Republicans often refer to the tax as the “death tax.”) Easing or repealing the estate tax has been a priority for fiscal conservatives for some time. Republicans argue that the estate tax hampers small businesses and family farmers; they also say the estate tax amounts to “double taxation.”
“This amendment provides real relief to our family-owned businesses. In a time when our government has handed out billions upon billions to failed Wall Street banks, it is time we provide a little relief to our businesses on Main Street that are in need of help right now,” Lincoln said.
Other Democrats counter that attempts to repeal or ease the estate tax are mainly for those who are already wealthy, since the tax affects a relatively small number of people. In order to be subject to an estate tax, the estate being willed must exceed a total taxable value of $1 million – according to the Internal Revenue Service, only 2 percent of estates are subject to the estate tax.
Harry Reid, D-Nev., said it is “so stunning, so outrageous, that some would choose this hour of national crisis to push an amendment to slash the estate tax for the super wealthy.”
“The proposal now before us would take $100 billion of American taxpayer money … over the next few years and spend it on slashing taxes on the estates of the wealthiest two-tenths of 1 percent of Americans. So 99.8 percent of Americans would derive no benefit—none. In fact, 99.8 percent of Americans would actually see their tax dollars redirected to the estates of those who are at the very top of the economic food chain,” Reid said.
The amendment was adopted by a vote of 51-48. Every Republican present voted for the amendment. Of Democrats present, 10 voted for the amendment and 46 voted against it, including the most progressive members. The end result is that the measure went forward with language that would allow for future legislation to ease the estate tax.