House Votes to Repeal Estate Tax - But Passage into Law Remains Unlikely
On April 16, 2015, the House of Representatives voted 240-179 to repeal the estate tax. The vote was mostly along party lines. The Death Tax Repeal Act (H.R. 1105) approved by the House would not change the step-up in basis rules, which eliminate capital gain in appreciated assets at death under current law. This is different than most past repeal proposals, which in some manner eliminated or modified the stepped-up basis rule as a way to offset the revenue loss from estate tax repeal. With no revenue offset to the budget impact in this Act, the estimated 10 year cost of repeal is $269 billion.
The only thing the passage of this legislation should portend is the beginning in earnest of positioning for the 2016 elections. It is unclear whether the Senate will even take up the legislation, and the White House has indicated the president will veto any bill presented to him.