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Estate tax: The House Democrats’ line in the sand?

December 15, 2010

We Texans are a mouthy bunch. Many of our pronouncements have been enshrined in quotation collections. Among my favorites are Davy Crockett's "You may all go to hell and I will go to Texas" and "How 'bout them Cowboys?!" from former Dallas NFL coach Jimmy Johnson.

There's no exact quote, but everyone's well aware that drawing a line in the sand means you're prepared to take no more and do whatever it takes to defend your position. Although it's likely apocryphal, the definitive line in the sand demonstration is said to have come from Col. William Barrett Travis in March 1836 when he readied his troops in the Alamo for their last battle.

That phrase has been used a lot of late in connection with the upcoming fight in the House of Representatives over the tax cuts deal Obama reached with Congressional Republicans.

Still smarting after midterm elections mean the loss of control of the House next session, lame duck Democratic Representatives are in no mood to quietly accept what they see as their party leader's deal with the devil. They told the prez so via a recent caucus vote.

And as they wait for the Senate to finish up its rubber stamping of the deal, House Democrats are working out what changes they want in the tax cuts proposal.

Their line in the legislative sand looks to be the estate tax.

A group of 28 moderate House Democrats , led by Pennsylvania's Allyson Y. Schwartz, last week sent a letter to the White House arguing for the estate tax in 2011 and beyond to be set at the levels already approved by the House: a 45 percent tax levied on estates worth at least $3.5 million.

Of course, some of those letter signers lost in November so they have nothing left to lose politically.

When push comes to shove, with 2010 winding down and every taxpayer facing possible income tax rate hikes next year, not to mention out of work folks continuing to go without unemployment benefits, will enough disgruntled Democrats hold firm for the estate tax changes.

I doubt it. Even if they could get the House to approve it, the altered bill then would have to go back to the Senate for re-approval. That's not likely, as Sen. Jon Kyl (R-Ariz.) helped craft the estate tax section in the Senate bill.

But watching this group of House Democrats make their last majority party stand on Capitol Hill will be interesting.

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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