Tuesday, April 12, 2005

House to Vote on Permanent Repeal of Estate Tax, 4/12/05

The Center on Budget and Policy Priorities has a piece on the permanent repeal of the estate tax.
The House of Representatives is expected to consider legislation this week to make permanent the repeal of the estate tax, without offering any offsets to pay for this costly tax cut. As part of the tax-cut package enacted in 2001, the estate tax is being gradually reduced before being repealed altogether in 2010. But the provisions of that tax-cut package expire after 2010; as result, the estate tax is slated to be reinstated in 2011.
  1. The Joint Committee on Taxation estimates that extending repeal beyond 2010 would reduce revenues by $290 billion through 2015, including $72 billion in 2015 alone.

  2. But the Joint Tax Committee's estimate essentially captures only the cost of four additional years of estate tax repeal. The revenues losses associated with 10 more years of repeal — for the period from fiscal year 2012 through fiscal year 2021 — are much higher, about $745 billion.

  3. When the associated $225 billion in higher interest payments on the debt are taken into account, the total cost of repealing the estate tax for a decade would be nearly $1 trillion.

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