The House approved on a party-line vote Wednesday legislation that would extend the Bush-era tax cuts for one year.
The vote on H.R. 8 was 256-171, with 20 Democrats joining all Republicans in the symbolic vote.
Aside from extending the income-tax cuts, the legislation would extend the current estate-tax levels of a $5 million per-person exemption and a 35 percent maximum tax rate. It would also extend the portability and unification of the estate and gift tax provisions added to the government's tax policy in late 2010.
Additionally, the legislation would continue another amendment to the Bush tax cuts: allowing the estate tax exemption to account for inflation. This provision raised the exemption from $5 million to $5.12 million for 2012.
However, the legislation has no hope of passage in the Senate, and President Obama said in a statement that he would veto the bill if it reaches his desk.
Andrew Katzenstein, a partner in the Personal Planning Department with Proskauer in Los Angeles, says that if the Bush tax cuts expire at the end of the year, income-tax rates for the highest-earning individuals and families will rise from 36 to 39 percent, an eight percent increase.
