Yesterday, the Senate voted 81-19 to pass the Obama Tax Plan, and the early line was that the House would vote on the plan today. Early on there were reports that the voting had hit snags, as House Democrats tried to add various provisions to the bill, but pundits still held out hope that a vote would happen today. Now, as the day grows late, the last report out of Washington hinted that the vote might actually not take place until tomorrow, since the house is still debating the bill.
The pundits expect that the House Democrats will attempt to add various provisions, and some think that they may hold up the bill until next week, since the Senate is not scheduled to adjourn before then. In the end, though, the expectation is that the Dems will approve the bill as is (threats to reduce the estate tax exemption to $3.5 million be damned) and then claim that they fought long and hard against it, but didn’t want to delay unemployed taxpayer’s benefits right before Christmas.
Of course, that just smacks of pure politics for the sake of politics – Democrats making life rough because it’s a predominately Republican proposal, and not on philosophical grounds – but what it really is is the fruits of two or more years of delay. If the Democrats really had such a priority on the issue of tax cut extension, a deal could have been ramrodded through like the health care bill long ago. Truth is, until the elections in November gave the Democrats a severe wake-up call (which they knew was coming, but did nothing legislatively to prevent), this wasn’t a priority issue.
As a member of the ISBA Federal Taxation Section, I traveled to Washington D.C. in 2006 – yes, 2006 – where we discussed the issue of the estate tax repeal in 2010 with various members of Congress (including the now-ousted Melissa Bean, who appeared clueless on anything tax-related), Senators, and their respective staffers. We were assured that the estate tax would still continue to exist in 2010, but there was an election before then, and that it would be taken up once the Dems controlled Congress and the Senate (this was May, before the mid-terms).
In 2007, the assurance was repeated. In 2008, it was hedged, saying that the upcoming presidential election was a priority, but when/if Obama won, it would be settled. In 2009…eh, you get the idea.
So why cry now? I doubt if the provision will change. Congress has had this issue in front of them for four years, if not longer. It simply isn’t a priority, because, in all honesty, the estate tax only brings in around 2.0% of federal revenue. It only seems bigger, but that’s arguably because of the efforts of estate planners, who need certainty in the estate laws to do their jobs.
As always, stay tuned.
