NAIFA GovWatch

Congress Completes Year-End Tax Bill

Issue: Federal Taxes

Date: December 17, 2010

Update: At just before midnight on December 16, the House of Representatives passed H.R.4853, the bill passed by the Senate that extends for two years all current law income, capital gains and dividend tax rates, for all taxpayers. It also extends eligibility for 99 weeks for unemployment benefits for December, 2010 and all of 2011.

The House vote was 277 to 148.

The bill now goes to President Obama for signature into law. The President has indicated he will do so this afternoon.

Details of what the bill contains are in the December 15 GovWatch.

Before passing the Senate-approved bill without change, House members attempted to amend the bill by changing the estate tax provisions. That amendment, authored by Rep. Earl Pomeroy (D-ND), failed by a 194 to 233 (one voting present) vote. It would have changed the indexed exemption amount from $5 million/individual to $3.5 million/individual (also indexed). It also would have raised the top estate tax rate from the 35 percent in the Senate-passed version of H.R.4853 to 45 percent. Reunification of the estate and gift tax systems -- an issue important to NAIFA members -- would have been retained. Like the Senate provision, the Pomeroy amendment would have been a two-year rule, for 2011 and 2012, with an election for estates of decedents dying in 2010. Under the election, those estates could choose between the law in 2010 or the 2011-2012 estate tax rules.

It was a contentious debate in the House, marked by delays and "bumps" on the road to enactment. It took from 10 in the morning until almost midnight to work out.

NAIFA Staff Contact: Diane Boyle, Vice President - Federal Government Relations; or Dani Kehoe, NAIFA Outside Counsel.

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