Thomas Estate Tax Relief Measure Approved by the House

Thomas Estate Tax Relief Measure Approved by the House

Today, the U.S. House of Representatives approved H.R. 5638, the Permanent Estate Tax Relief Act of 2006. H.R. 5638, authored by Congressman Bill Thomas, was passed by a bipartisan vote of 269-156. If enacted, this estate tax relief bill would give Americans permanency and certainty for their estate tax planning.

"I, along with the majority of House members, have voted time after time in a bipartisan manner to fully repeal the estate tax," said Thomas. "So far, those efforts have died in the Senate. Today, the House had a choice: make another political statement or approve a bill that can become law. The strong bipartisan support today shows this House is ready to make law."

H.R. 5638 would permanently eliminate the estate tax for 99.7 percent of all Americans. Under current law, the estate tax gradually declines until it is fully eliminated in 2010. However, in 2011, the tax returns in full force, allowing an exemption from the estate tax of $1 million per person, and taxing all other estates under a progressive tax rate structure, topping 55%. H.R. 5638 would permanently reduce the estate tax on Americans beginning in 2010, by increasing the exemption amount to $5 million per person, taxing estates worth between $5 million and $25 million at a rate equal to the capital gains tax rate (currently 15%), and taxing estates worth over $25 million at a rate equal to double the capital gains rate. Among other things, the bill would also unify the estate, gift, and generation-skipping transfer tax, giving individuals greater flexibility to make estate planning decisions during their lifetime.

Before it can become law, H.R. 5638 needs to be approved by the United States Senate. If passed by the Senate, the bill would be sent to the President for his signature.

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