Republican proposals to repeal or dramatically reduce the estate tax would only benefit a tiny percentage of the wealthiest of Americans -- some of whom are helping to write the GOP's tax bills in Congress.
An analysis by McClatchy calculated the net worth of lawmakers on the House and Senate tax-writing committees. The most conservative estimation showed at least 12 percent of those committees' members could benefit personally from reducing or eliminating the estate tax. But that number could be as high as 25 percent, depending on the actual value of their assets and liabilities, which are presented in the disclosures as a range in values.
Rep. Kenny Marchant, R-Texas, serves on the House Ways and Means Committee and is one of the members who could benefit from the tax’s repeal.
Marchant was one of 24 members who voted against a failed amendment proposed in committee last week by Rep. Judy Chu, D-Calif., aimed at stopping the repeal of the estate tax. He voted in favor of the bill as a whole, which contains that provision.
Personal financial disclosures estimate Marchant's wealth to be between $3.2 million and $21.6 million. His office declined to provide the exact figure.
In an interview with the Star-Telegram Wednesday, Marchant said he was “probably somewhere on the bubble” of qualifying for the tax, but it was “not a major consideration” in his decision.
“I’m 66 so I’ve already done all of my estate planning a long time ago,” said Marchant. “I’ve taken the tax into consideration with my estate planning.”
He said he would be “probably sympathetic to doing away with” the tax, but thought the committee had reached a good compromise in doubling the limit for qualification, then phasing it out over time.
“If you look at the number of people that file where they derive most of the money, it’s really from the huge estates,” said Marchant.
Nationally, only two-tenths of 1 percent of Americans will owe estate taxes when they die, according to the left-leaning Center on Budget Priorities. The center estimated that just 5,400 estates across the country are large enough to trigger the estate tax, including 400 estates in Texas.
The tax kicks in on estates with assets worth more than $5.49 million per individual, including retirement accounts and life insurance payouts. Any inheritance beyond this $5.49 million exemption is taxed at 40 percent under current law. Money donated to certain charities or left directly to surviving spouses isn’t taxed.
Republicans in the House want to phase out the tax entirely, while senators have proposed doubling the threshold to $10.98 million per individual. Repealing the tax is estimated to cost $279 billion over the next ten years.
To determine whether members of congressional tax-writing committees might benefit, McClatchy totaled the low and high values for each member’s assets and subtracted the highest possible value of their debts. Members of Congress aren’t required to include their personal residences among their assets, unless they derive any income, such as rent, from them, so McClatchy's assessment is a conservative estimate of how many members of these committees might be able to leave more money to their heirs if Congress enacts changes to the estate tax.
The GOP is pushing hard to pass a major tax overhaul before the end of the year. They're pitching their bills as a simplification of the tax code, relief for the middle class as well as corporate cuts designed to spur job growth.
The estate tax is just one element -- albeit a controversial one -- of a massive tax overhaul effort by Republicans. Few lawmakers are likely to base their vote on the fate of that tax alone, regardless of whether it might benefit them or their heirs.
The House tax-writing Ways and Means committee passed its version of the bill last week on a party-line vote. That legislation is expected to get a vote in the full House on Thursday.
The Senate's Finance Committee also is expected to vote on its version of the bill on Thursday.
Lindsay Wise, Ben Wieder, Joseph Cooke and James Whitlow contributed reporting.