Hoyer Statement on Permanent Extension of Estate Tax Relief

“I rise to support this bill, which permanently extends estate tax relief to American families—and which strikes a fair balance between what we owe to families, farmers, and small businesses, and what we owe to our country’s fiscal future.

“This bill simply continues present law at current rates and exemptions. But it does not abolish the estate tax altogether, which would be a severe mistake. Abolishing the estate tax would add billions and billions to our deficit—and while a small number of wealthy families would benefit, the growth of our economy as a whole would suffer. So would vital programs on which millions of Americans rely. The estate tax also sets a limit on the concentration of inherited wealth from generation to generation—which, at a time when this country’s middle class is truly struggling, would make inequality even starker and more damaging to our country’s social fabric.

“That is why advocates of a dynamic economy have supported an estate tax for generations. When first proposing an estate tax, Theodore Roosevelt said: ‘the man of great wealth owes a particular obligation to the State because he derives special advantages from the mere existence of government.’ And As Bill Gates Sr. recently argued, the estate tax ‘puts a brake on the concentration of wealth and power, generates substantial revenue from those most able to pay and encourages billions of dollars in charitable giving each year. The estate tax is not only fair, but an essential component of our nation’s economic dynamism.’

“Finally, it’s important that this bill is permanent, and not a temporary fix; that guarantees families, farmers, and small businesses the certainty they need to plan ahead. President Bush’s estate tax policy, by contrast, gave the country anything but certainty: it phased out the estate tax, repealed it entirely for 2010, and then brought it back at 2001 levels for 2011. That was truly irresponsible tax and fiscal policy, which made it impossible for families to plan with confidence for the future. It also hid the policy’s true cost to our national budget. This bill can change that: it is in keeping with President Obama’s pledge of a new honesty in budgeting.

“I also want to point out that passing this bill is also an important step toward fiscal responsibility, because attached to it is the House’s support for statutory pay-as-you-go, or PAYGO. As we know, the principle of paying for what we buy was central to turning record deficits into surpluses under President Clinton—and it can be an important step in our return to fiscal health today. By passing this bill, we can also strengthen our commitment to pay for all new policies that reduce revenues or expand entitlements.

“In fact, I wish that this extension of estate tax relief were also paid for—but because it is so unlikely that we will have the votes to pay for the extensions of policies with bipartisan support, I choose to support the strongest version of PAYGO possible. That is the PAYGO provision attached to this bill—and I hope that the Senate will join the House in taking this essential first step out of America’s deep fiscal hole.

“I urge all of my colleagues to support this bill, which makes a fair estate tax permanent, makes estate planning more reliable, and makes our commitment to fiscal discipline clear.”