Rep. Kenny Hulshof (R-MO) appeared on Washington Journal to defend the bill he’ll be introducing this afternoon to permanently repeal the estate tax.
Rep. Earl Pomeroy (D-ND) followed to promote his amendment (pdf) that would raise the exclusion rate to 6 million per couple beginning next year and does not cause a rise in the capital gains tax rates that he said is hidden in Hulshof’s bill.
The Washington Post concurs:
In a magnificently ironic twist, this change could hit the very people estate tax repeal is supposed to help: family farmers and small-business owners. Farms, for example, tend to have land that’s appreciated enormously and equipment that’s been depreciated but that still has significant value. If the heirs hold on to the farm the valuation change won’t have a big effect. But if they sell, as many do, their tax bill under “repeal” could easily end up being bigger than if the estate tax had been left in place. The Agriculture Department estimates that about 300 farm estates would have to pay estate taxes in 2009 but that (even based on farm values in 2001) about 400 farm estates would have unrealized capital gains greater than the $1.3 million exclusion. Lawmakers: Imagine what you’re going to hear from your constituents if you do them this favor.
Hulshof dodged a caller’s complaint about the Alternative Minimum Tax by saying it’s a problem that should be addressed in the future yet offered as an immediate reason for passing H.R. 8 a need to relieve tax payers of the cost of hiring experts to avoid paying the estate tax. That’s exactly what people are doing now to avoid the AMT.
What is the point of all of this? I realise politics and avoiding damaging deficit news drive it but Pomeroy’s statement that he was not allowed to bring his amendment to the floor if it included how to pay for it should exceed reason no matter what side of the aisle you sit on. That it doesn’t says it all about the fiscally irresponsible majority in Congress.
Kurt Schuler, Senior Economist to JEC Chairman Jim Saxton, had this to say about the AMT in 2001:
“The history of the AMT illustrates the need to think about unintended consequences before imposing any new tax.”
The same should apply to H.R. 8. since despite its billing as a tax cut it raises the tax burden and to ignore that is intentional.