This was on a motion that the House immediately vote on the resolution or “rule” setting the terms for debating a bill that was designed to make the estate tax permanent and to reduce its impact on those who will be required to pay it. Supporters of the bill focused on the fact that, under its language, in 2011 the amount of an estate exempted from the tax would be increased to $3.5 million and the tax rate would be reduced to 45%. Opponents noted that the estate tax had been repealed in 2002, and were against this bill because it would effectively reinstate that tax.
Rep. Polis (D-CO) was leading the support for the rule and for the motion to have an immediate vote on it. He began his statement in support by describing the bill as “a significant tax cut.” Polis then defended the policy of taxing an estate by claiming that such a tax “distorts a free market less than an income tax. Instead of taxing productive capital, it takes taxes from a random heir . . . Individuals like myself, who through hard work have been able to start businesses, create jobs, and, as a result, have been rewarded 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. And an estate tax . . . is critical to prevent a permanent aristocracy from arising in this country.” Polis then cited a finding by The Urban-Brookings Tax Policy Center that only one out of 400 Americans would be subject to an estate tax.
Rep. Lincoln Diaz-Balart (R-FL) led the opposition to the rule and to the motion to vote immediately on it. His opposition was based on his opposition to the entire idea of an estate tax, which he suggested should be called a “death tax”. He claimed that, without the legislation, the estate tax would “disappear next year.” Diaz-Balart also claimed: “The underlying bill would undo the repeal of the death tax and instead bring back the tax, extend the estate tax rate of 45 percent, and include an unindexed exemption.”
Diaz-Balart focused on what he said would be the negative impact of the estate tax on small businesses. He noted that small businesses “are responsible for 60 to 80 percent of all new net jobs that were created in the last decade. If the (Democratic) majority continues with their current policies . . . of placing more and more burdens on small business, the unemployment rate is going to continue to rise.”
He also expressed his opposition to what he called the “excessively high rates of taxation, especially when we realize that the tax is imposed at the end of a lifetime of work on which taxes were paid throughout the stages in which income was made . . . This double taxation . . . is destructive to family-owned businesses and farms, which are often torn apart or need to be liquidated entirely just to pay those burdensome taxes at the time of death.”
The motion to move to an immediate vote on the rule setting the terms for debating the bill extending the estate tax passed by a vote of 228-187. All two hundred and twenty-eight “aye” votes were cast by Democrats. Sixteen other Democrats joined one hundred and seventy-one Republicans and voted “nay”. As a result, the House moved to an immediate vote on the rule setting the terms for debating the bill extending the estate tax.