Pomeroy Estate Tax Bill Passes House

As expected [1], the House brought up the Pomeroy estate tax bill this afternoon, and the legislation passed [2] by a narrow score of 225 to 200. The bill passed mainly along partisan lines, but 26 Democrats joined the Republican caucus in opposition to the measure. Nine House members did not vote. With passage by the House, the bill now has to make it through the gauntlet that is the Senate.

Some senators have made public grumblings about aspects of the Pomeroy legislation. Sens. Max Baucus (D-MT) and Kent Conrad (D-ND), chairs of the Senate Finance and Budget Committees respectively, seem to approve of extension of the 2009 estate tax, but argue that Congress should index the tax for inflation, something the Pomeroy bill does not do.

Making matters worse, with health care monopolizing the Senate's time, legislators are working with a very small window to bring an estate tax bill to the floor, debate it and pass it. Any legislation similar to the Pomeroy bill brought to the Senate floor will also be more vulnerable to amendments seeking to weaken the estate tax further. While the House averted disaster by bypassing a competing estate tax proposal introduced by Shelly Berkley (D-NV), which essentially was an even bigger giveaway to the rich than the Pomeroy bill, the Senate may not be so lucky.

Back in March, when the Senate passed its budget resolution to begin the FY 2010 appropriations process, senatorial opponents of the estate tax won [4] a small battle by adopting an amendment by Sens. Blanche Lincoln (D-AR) and Jon Kyle (R-AZ) that reduced the estate tax to a $10 million exemption per couple at a 35 percent rate. Later, conferees meeting to reconcile House and Senate versions of the budget resolution stripped the provision out, but the danger of the Senate passing similar legislation again is still there.

Unfortunately, "moderate" Democrats that believe that further weakening or repealing of the estate tax will help family farms and small businesses enjoy much more power in the Senate than in the House. Of course, the argument to eviscerate the estate tax in regard to helping farms and small businesses is ridiculous, and plenty of analyses (in fact, two just came out this week) from respected think tanks [5] and policy houses [6] have shown that reducing the estate tax beyond 2009 levels or repealing it would only help the richest 0.2 percent of Americans and have no effect on the transfer of farms or small businesses. None. Zero. Zilch.

Image by Flickr user eclectic echoes [7] used under a Creative Commons license.