The House Ways and Means Committee on March 25 approved seven bills dealing with oversight of the IRS and repeal of the estate tax. Democrats on the committee were in agreement on the IRS measures but balked at repealing the estate tax. The bills are expected to come up for a vote in the House after Congress returns from a two-week recess on April 13.
Alluding to the current activity and deliberation among lawmakers regarding tax reform, House Ways and Means Chairman Paul Ryan, R-Wis. said the entire tax code needs to be replaced and the committee’s action with the markup is a “step in that direction.” He called the tax code “a mess,” and sharply criticized the IRS in his opening statement, saying, “The IRS works for the taxpayer, not the other way around. It’s their job to make doing your taxes as easy as possible. And so the burden is on them to prove any wrongdoing. The burden is on them to protect people’s privacy. And the burden is on them to tell taxpayers their rights. That’s the attitude they should have.”
Ways and Means ranking member Sander Levin, D-Mich., denounced the estate tax repeal bill, pointing out that new analyses from the Joint Committee on Taxation indicates that repealing the estate tax would cost $269 billion over 10 years. He highlighted the fact that the JCT noted that, in any given year, fewer than 5,500 households would benefit from a repeal of the estate tax, with 75 percent of the tax cut going to inheritors of estates valued at more than $20 million. Levin called the measure “irresponsible,” charging that the legislation amounts to a “massive” tax cut for a small number of the wealthiest households.“Americans already overwhelming believe that the tax code is stacked in favor of a select few”.
The Will Doctor notes that this activity may provide an opening for discussions to partner the repeal of the Estate Tax, with the repeal of the “step up” in basis at death, discussed in recent posts on this blog. The primary issue to be resolved in our mind is determining the veracity of competing claims on the actual amount raised by the tax, after appropriate offsets for ancillary lost income tax revenue, and other factors.