The longtime conservative goal of repealing the estate tax slipped as a top priority as Republicans began the hard work of legislating tax reform last week.
The Senate version of the Tax Cuts and Jobs Act, revealed Thursday night, would not eliminate the estate tax. Instead, it would double the threshold for the tax.
The “death tax,” as conservatives call it, would remain, even though the joint tax framework agreed to in September by the Trump administration and congressional Republicans called for eliminating it. No other goal in that agreement was similarly discarded in the early going.
The House bill, which advanced through the Ways and Means Committee Thursday, would repeal the estate tax. That repeal would come in 2025, although in the meantime the exemption level would be doubled, from $11 million for married couples today.
Outside estate tax opponents are scheduled to gather in Washington on Tuesday to strategize about how to get repeal into the final legislation — and to prevent it from falling out of the deal altogether.
“Let’s just say I’m very surprised and very, very displeased that they didn’t find a way to repeal the death tax,” said Dick Patten, head of the anti-estate-tax group the American Business Defense Council.
A major pressure against including the estate tax in the legislative package is the cost. Republicans must keep the total next tax cut under $1.5 trillion over a decade to comply with budget instructions. In turn, they must use those budget instructions to pass the bill without facing a Democratic filibuster.
The estate tax repeal is one expensive provision that can be dialed down, or dropped altogether, without affecting the other pieces of the bill.
The GOP reckoning with the cost of repeal was on clear display Thursday. Republicans on the House Ways and Means Committee needed to lower the size of the tax cut by $74 billion to bring it under the $1.5 trillion number. One of the ways they met that target was by moving back the date of estate tax repeal by one year. That delay saved them $21.5 billion, according to Congress’ Joint Committee on Taxation.
Senate Republicans told estate tax opponents that such fiscal considerations kept repeal out of their bill.
That is not to say that there aren’t ideological reasons not to pursue repeal. Although estate tax elimination is popular among Republicans and the broader public, the GOP has a paper-thin margin of just two senators in the upper chamber. Sen. Susan Collins of Maine, among others, has staked out opposition to eliminating the estate tax.
But leaving elimination of the tax out of the major tax package would be a disappointment for conservatives and business groups that have long worked with Republicans to build support for repeal.
Estate tax opponents are OK with a delayed repeal, figuring that it wouldn’t be called off unless Democrats managed to gain control of supermajorities before 2024, said Palmer Schoening, chairman of the Family Business Coalition, another group advocating on the issue. “All things considered, it’s acceptable because it provides a path to permanent repeal,” he said.
This post originally appeared on Washington Examiner