Fifty-eight Democrats crossed party lines Wednesday to join Republicans in a vote to repeal the tax known as the Death Tax.
The repeal of the estate tax, if made into law, would be phased in slowly over a period of 10 years, with most of the savings coming in the next decade. "If you want to protect your estate, don't die for 10 years," quipped Rep. Charles Rangel of New York, senior Democrat on the House Ways and Means Committee.
Although only about 2 percent of Americans would be directly affected by a repeal of this tax, there is great support for the repeal as a means of saving small family-owned businesses. Under the current estate tax rules, which apply a hefty tax on estates valued at over $675,000, many heirs of family-run businesses find they are forced to sell the business in order to pay the taxes.
The bill, H.R. 8, calls for a change in capital gains taxes, which would go hand in hand with the repeal of the estate tax. The bill would alter the way assets are valued for capital gains purposes, allowing the first $1.3 million in gain to be exempt unless the heir is a surviving spouse, in which case the first $4.3 million in gain would be exempt.
The bill now goes to the Senate, where it is expected that changes will be made.