This was a vote on a motion to send legislation, designed to make the estate tax permanent and to reduce its impact on those who will be required to pay it, back to committee with instructions to add additional language. That additional language would have eliminated the imposition of the estate tax in the remaining portion of fiscal year 2010 and in all of fiscal year 2011.
Rep. Heller (R-NV) had previously attempted to terminate the estate tax completely, but had been prevented from doing under House rules, because he had not identified a way to “pay for” the revenue lost by eliminating the tax. The issue of whether the estate tax should be made permanent had become a very contentious one, with supporters claiming that it was fair and would be imposed on a very small percentage of Americans. Opponents had taken to calling it a “death tax”. They claimed it was unfair to those who had paid a tax on their previous earnings and that it was especially damaging to small businesses.
Speaking in support of his motion, Heller argued that “the federal government shouldn't be entitled to half or even one-third of your assets when you die . . . the purpose of the (estate) tax is to erase all of an individual's net worth within three generations.” Heller went on to call the estate tax “a jobs destroyer” and noted that: “One recent study showed that eliminating the death tax will increase small business capital by over $1.6 trillion . . . increase the probability of hiring by 8.6 percent . . . increase payrolls by 2.6 percent . . . expand investment by 3 percent . . . create 1.5 million additional small business jobs (and) . . . reduce the current jobless rate by almost 1 percent.”
During previous debate on the merits of the estate tax, Rep. Polis (D-CO), a supporter of the tax, had argued that wealthy individuals “like myself . . . with the financial resources to provide a high standard of living for our families, have a duty to our fellow Americans to pay our fair share.” He claimed: “Many of the people who have accumulated great wealth in this country have, throughout their lives, paid the capital gains tax rather than the income tax rate . . . I'm the fourth-or fifth-wealthiest Member of this body (and) . . . I've paid the capital gains tax. That is a 15 percent tax . . . (a lower) percentage tax than members of my staff here in Congress that earn $50,000, $60,000 a year . . . .” Polis also cited a finding by The Urban-Brookings Tax Policy Center that only one out of 400 Americans would be subject to it.
Rep. Boyd (D-FL) argued against the specific language that the motion would have added. He said that suspending the estate tax for less than two years would create great uncertainty among those who would be subject to it and not allow them to do well-reasoned estate planning.
The motion to add the requested language was defeated by a vote of 187- 233. One hundred and sixty-nine Republicans and eighteen Democrats voted “aye”. All two hundred and thirty-three “nay” votes were cast by Democrats. As a result, language was not added to the legislation imposing the estate tax that would have suspended it until after the 2011 fiscal year.