House sends estate tax bill to Senate

he House voted 269-156 on Thursday to cut taxes on inherited estates and relieve thousands of heirs from paying the tax collector. Beginning in 2010, estates worth up to $5 million for an individual and $10 million for couples would escape taxation.

The White House said that while the bill falls short of complete repeal, it "provides significant relief from the death tax."

The bill restores estate taxes in 2010, the one year that they had been repealed under Bush's first tax cut. The bill cuts the estate tax in years after.

Congressional tax experts estimated that if the changes become law, only 5,100 estates would face taxation when the changes are fully in effect in the fiscal year beginning Oct. 1, 2011. The Internal Revenue Service levied taxes on more than 30,000 estates in 2004, the most recent figure available.

The $5 million and $10 million exemptions would increase automatically each year to keep pace with inflation.
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Congress' Joint Committee on Taxation estimated the tax reductions amount to roughly $283 billion from 2006 to 2016.

House Republicans sent the bill to the Senate with a strong message that they would not accept any Democratic overtures to negotiate the tax higher.

Grover Norquist, president of Americans for Tax Reform, said that if the bill becomes law, it makes abolishing the estate tax easier by reducing the eventual cost of repeal.

"When you come back to finish it off, it's just not that big a deal," he said.
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