Dreier Votes for Permanent Estate Tax Relief

June 22, 2006

WASHINGTON, DC - Congressman David Dreier (R-San Dimas,CA), Chairman of the House Rules Committee, voted today to approve legislation that would make estate tax relief set to expire in 2010 permanent. The Permanent Estate Tax Relief Act of 2006, H.R. 5638, was approved with bipartisan support, 269-156.
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"The death tax is wrong, it’s unfair, and it’s past time it be put to rest," Dreier said. "The House has voted many times to end it completely. Unfortunately, the Senate has been unable to pass the same approach. However, this bill provides significant estate tax relief and will make it permanent. The key here is certainty. A looming expiration of estate tax relief creates a sense of uncertainty in the tax code, uncertainty that makes planning more difficult for small business owners and family farmers. This uncertainty hurts our economy by discouraging investment. While I’d prefer a complete elimination of this onerous tax, I believe providing significant, permanent relief is critical."

Estate tax relief provided in 2001 is set to expire in 2010. Unless action is taken before 2011, the estate tax exemption will drop to $1 million per person and the maximum estate tax rate will increase to 55 percent. The Permanent Estate Tax Relief Act of 2006 would reunify the estate, gift, and generation-skipping transfer taxes, giving individuals greater flexibility to make estate planning decisions. It would also increase the exemption amount to $5 million per person (indexed for inflation) effective January 1, 2010. It will also reduce the rate of tax on estates up to $25 million to the capital gains tax rate (currently 15 percent) and reduce the rate of tax on estates of $25 million or more to twice the capital gains rate (currently 30 percent).

Dreier noted that recent reports of increased revenues to the federal treasury prove that tax relief helps spur growth and revenue, rather than discourage it. "From 2004 to 2005, government revenues increased by 14.5 percent. This directly followed the tax relief of 2003," Dreier said. "The evidence is clear. Tax relief works. Tax relief is good for American families, workers, farmers, and small business owners. Providing estate tax relief is the right thing to do. I’m pleased we had bipartisan support to do it."