House Democrats Will Vote on Tax Bill; Estate Tax Emerges as Main Concern

Despite last week’s threat by House Democrats to prevent Obama’s tax compromise from reaching the floor, House Democrats will allow a vote on the bill. What form the bill is in when it comes to the floor is what’s currently under debate and discussion.

Democrats’ main concern is the estate tax portion of the compromise. Rep. Van Hollen (D-MD) thinks that the estate tax didn’t have to be part of this deal and that the Republicans never said that the deal was off the table if they didn’t get the Kyl estate tax. The estate tax provision will cost $68 billion, whereas the House bill would cost $43 billion.

Despite the bill having elements distasteful to both sides, it looks as though they’re willing to compromise.  With Republicans diminishing the Democratic majority in the Senate and winning control of the House in the new Congress, Democrats realize that they need to cut a deal now. They also realize that an increase in taxes for everyone on January 1 would be disastrous for the economy. Thus, we’re seeing a softening in the Democratic opposition to the tax and benefits package.

White House senior adviser David Axelrod stated that “[t]he focus must be on what is best for the country right now, rather than scoring political points or settling political scores.” He further stated, “I think the Senate is going to take this bill up tomorrow, and we believe that when it comes back to the House, that we will get a vote, and that we’ll prevail there,” Axelrod said, adding that “everybody understands what it would mean for the economy if we don’t get this done.”

Tom Cohen, Estate Tax Emerges as Key Democratic Beef in Obama’s Compromise, CNN, Dec. 12, 2010.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this to my attention.