House Votes to End the Estate Tax

The House voted Wednesday to eliminate federal estate taxes in 2010 and beyond, a repeal that Republicans hailed but many Democrats said would reward the richest families while deepening federal deficits.

President Bush’s 10-year, $1.35-trillion tax cut in 2001 included a slow phaseout of the estate tax by 2010, but the tax would be reinstated in 2011 when the entire 2001 tax law expired. As those dates approach and concern grows over record budget deficits, some family-owned businesses and affluent heirs have begun appealing to lawmakers for a deal that would provide estate-planning certainty.

House lawmakers voted 272 to162 to prevent the tax on inherited estates from reappearing after its one-year disappearance in 2010.

The House has passed bills repealing the tax several times since enacting the 2001 law. Those bills have languished in the Senate. Supporters hope a bigger Republican majority could mean the difference this year.

National Federation of Independent Business President Jack Faris said millions of small businesses were “looking for senators who are committed to supporting full repeal.”

Bush called the elimination “a matter of basic fairness.” He said, “The death tax results in the double taxation of many family assets while hurting the source of most new jobs in this country -- America’s small business and farms.”

Most estates are exempt from federal taxes. The IRS said about 2% of people who died in 2001 left estates subject to taxation.