Thomson Reuters Tax & Accounting News

Featuring content from Checkpoint

Back to Thomson Reuters Tax & Accounting News

Subscribe below to the Checkpoint Daily Newsstand Email Newsletter

White House threatens veto of Republican estate tax repeal bill

WASHINGTON (Reuters) – The White House on Tuesday said Democratic President Barack Obama’s advisers would recommend that he veto a pending Republican-authored bill to repeal the estate tax.

A vote on the bill in the House of Representatives could come as soon as Thursday, though it was seen as having little chance of becoming law.

Known by conservative opponents as the “death tax,” the estate tax tops out at 40 percent and is imposed on inherited assets worth $5.4 million or more. It has long been a target of Republican critics who say that it burdens grieving people.

The White House said in a statement that the bill to repeal the tax is a “fiscally irresponsible” measure that would “endorse the principle that the wealthiest Americans should not have to pay tax on certain forms of income at all.”

If adopted, the House bill would add $269 billion to the federal deficit over 10 years, according to Congress’s non-partisan Joint Committee on Taxation (JCT).

Representative Steve Scalise, the third-ranking House Republican, told reporters on Tuesday that the repeal bill would help owners of small businesses and family farms who must devote vast resources to try to shield their holdings from taxes when they are passed to descendants.

“It takes away from their ability to grow their business to actually create jobs in this country,” Scalise said, noting that Republicans in Congress have not had an opportunity to cast an estate tax repeal vote since 2005.

But only a tiny fraction of Americans pay the federal estate tax. About 5,400 estates nationwide, equal to 0.2 percent of Americans, will owe the tax in 2015, according to JCT.

“It’s ironic that my Republican colleagues are calling for a balanced budget and then in the same breath offering up a plan that would cost the government $269 billion in lost revenue over a decade,” said Democratic Senator Ron Wyden in a statement. (Reporting by Emily Stephenson and David Lawder; Editing by Kevin Drawbaugh, Sandra Maler and Cynthia Osterman)

Tagged with →