On April 13, by a vote of 272 to 162, the House voted to repeal the federal inheritance and gift tax—also known as the death tax—permanently. The Death Tax Repeal Permanency Act (H.R. 8), sponsored by Rep. Kenny Hulshof (R.-Mo.), will make death tax repeal permanent once the tax is phased out in 2010. Because of Democratic filibuster threats in the Senate when the gradual repeal was first enacted, the repeal of the tax cut was made only temporary. This is how it stands under current law, and Hulshof’s bill was an attempt to phase the tax out completely.
Republicans and some Democrats argued that the inheritance tax creates a bevy of perverse economic incentives and prevents family businesses from being passed from generation to generation.
Rep. Lynn Westmoreland (R.-Ga.) spoke in favor of the bill, criticizing Democrats for caring more about the government’s bottom line than the financial well-being of American workers hoping to pass something along to their children.
“[T]he Democrats really look at the person whom this bill would affect,” he said, “… as a gift who keeps on giving. One of the things our country needs is individuals who are willing to work hard and save their money. It is the basis of our economy and the American dream. … The current death tax punishes people for saving their own money, for fulfilling the American dream.”
Some Democrats, however, argued that the inheritance tax is a useful social engineering tool that keeps American families from accumulating too much wealth.
Liberal Rep. Jim McDermott (D.-Wash.) quoted President Teddy Roosevelt (R.) as stating: “The man of great wealth owes a particular obligation to the state because he derives special advantages from the mere existence of government.”
McDermott continued: “Republicans want to undo all the good for the sake of greed. Please, America, do not be phonied up by this rhetoric that we hear on this bill. They will pitch some gibberish about how they are helping Americans. That is nonsense. … If we repeal this [the inheritance tax], the rich get richer and America’s deficit gets deeper and redder. We create an oligarchic class in this country from whom the money can never be taxed. If they can manipulate it around while they are alive, they can never have to pay a penny.”
But Rep. Mike McCaul (R.-Tex.) noted that such wealthy people do pay taxes when they earn their money. “For too long, the federal government has been taxing working Americans, not once, not twice, but three times, on their hard-earned money,” said McCaul. “When they earn it, the government takes an income tax. When they spend it, the government takes a sales tax. And finally, even when they die, the government takes a tax from the grave.”
Although many Democrats supported final passage of the bill, some of them also voted in favor of a Democratic compromise that would have preserved the death tax, but increased the amount of an inheritance that is exempt.
A “yes” vote was a vote to permanently repeal the death tax. A “no” vote was a vote to keep the current law, under which the death tax returns in 2011.
For the Bill: 272
REPUBLICANS FOR: 230 | DEMOCRATS FOR: 42 | INDEPENDENTS FOR: 0 |
Aderholt |
Barrow |
|
Against the Bill: 162
REPUBLICANS AGAINST: 1 | DEMOCRATS AGAINST: 160 | INDEPENDENTS AGAINST: 1 |
Leach |
Abercrombie |
Sanders |
Not Voting: 1
REPUBLICANS: 1 | DEMOCRATS: 0 | INDEPENDENTS: 0 |
Gillmor |