The Real Deal New York

House to vote on repeal of “death tax”

Obama has threatened to veto the measure

April 16, 2015 08:00AM
By Tess Hofmann

Barack Obama and Kevin Brady

President Barack Obama and Kevin Brady

The House of Representatives will vote Thursday on a measure to repeal the controversial estate tax, or, as it’s dubbed by opponents, the “death tax.” The tax has a big influence on how real estate assets are held by owners. 

Republicans at large, including the bill’s sponsor, Rep. Kevin Brady of Texas, argue that the policy unfairly double-taxes wealth that was already taxed as income.

But while the bill is expected to pass in the House, it is highly unlikely to make it through the Senate, where just 54 of 60 needed Senators supported it in a nonbinding vote last month.

President Barack Obama also threatened this week to veto the measure if it is passed.

The existing law levies a 40 percent tax against the estate of a deceased person with over $5.43 million in assets, including real estate holdings.

For married couples, the threshold is $10.86 million, pursuant to the 2010 Tax Relief Act, which allows an estate of under $5.43 million to be transferred to a deceased person’s spouse without pushing them over the threshold for exemption.

High-net-worth individuals frequently use LLCs or partnerships with family members to mitigate the effect of the tax on real estate, by decreasing the value of their interest, according to Kathleen McCormack, a partner specializing in trusts and estates at law firm Cullen and Dykman.

“I think eliminating the estate tax is not going to happen… There have been so many concessions already,” McCormack said. “[The U.S. has] the highest concentration of wealth in the world, and eliminating the estate tax perpetuates that.”

In January, Obama proposed getting rid of the stepped-up tax basis, which would raise taxes on inheritances by imposing capital gains taxes on transferred assets. The proposal is opposed by most Republicans.

Rep. Brady’s office did not immediately respond to a request for comment.

Closer to home, Mayor Bill de Blasio and the New York City Council have brought up the idea ofa pied-à-terre tax, or a tax on homes worth at least $5 million whose owners are not full-time residents. Real estate players are, unsurprisingly, vehemently opposed to such a plan. 

  • Marc

    What a bunch of turds these communists in D.C. we have. Until Hitler (another Socialist) came along, many NYC Liberals proudly labeled themselves as “Communist”. That word became bad once he signed a non-aggression pact with Stalin. But as history teaches us words mean almost nothing, as deeds count more. We know the rest. All these sides had one strong component in common: All were Socialist. They confiscated the wealth of Individuals and simultaneously stripped the public of their guns. In Washington we have a similar idiot trying to do the same. This system has a guaranteed 100% rate of failure. Republicans are just a lighter version of democrats. Neither can be trusted. The only chance we will have to get economic freedom back & build real wealth instead of printing money and creating instruments of debt backed by nothing is unfortunately a total collapse.
    TRD has posted articles about the wealthy fat cats of NYC who write big checks to corrupt State, City & local politicians. These fats cats have only loyalty to the “mighty” dollar. Their listed political affiliations are but a means to funnel cash.
    Nothing will change without a collapse but with that we also risk and even worse situation if free markets are not allowed to operate and if guns belonging to the people are confiscated.
    What a shame. It was an awesome country until 1913. The whole world was jealous/envious about our progress and power. Then professional politicians became the norm & liberals like Teddy Roosevelt started telling us he knew better how to handle our money. What he started in office helped play a big role initiating income taxes. We have this fool to thank. The present morons in Washington are there to put the nails on the coffin.

    • Tyrannosaurus Rex

      Yes, a true oligarchy, dictatorship or kingdom is the only way to go. Allowing regular citizens, common people or women to participate in the voting process is ridiculous. A President elected by the people and for the people is foolhardy. We need an oligarch who feeds only the rich!! Who needs a society anyway?

      • Marc

        Who needs a constitution anyway to protect individuals?
        Just let mob rule decide on taxing the hard earned wealth of people because if you don’t have it then NO ONE should have wealth, right?
        We need more Communism because the “collective good” should always win out, right? It has to be right if majority vote says so, right?
        Who needs a free society anyway?
        Just have a committee decide on everything!!!! Screw the constitution!!!

        • harry

          Don’t waste your breath. The mob neither understands nor has any interest in the US Constitution nor in morality or fairness. As long as the masses (who will soon include non-citizens, if the NYC Council has its way) vote for the guy (or girl) who promises them more “free stuff” from the “fat cats & Wall Street”, (and of course the angry “disenfranchised” WILL continue to support the Hillarys, Obamas, DeBlasios, etc) we are all doomed.

  • The only reason Republicans can get away with repealing the trust fund tax is that their base believes their mobile home might one day be worth enough to qualify.

    • Tyrannosaurus Rex

      And one day they’ll all be able to see Russia from their house!

      • Edward Johnson

        i don’t understand your post – can you please explain it?

        • Marc

          Asking for an explanation of a moronic statement is useless.

    • WannaBeLandlord

      At least the Republican redneck owns a mobile home. The NYC liberal has a rent-controlled lease as an asset.