This was a vote on passage of legislation exempting income from investments in small businesses. In addition, the bill restricted the use of granter retained annuity trusts (GRATS). GRATS essentially allow individuals to transfer wealth to family members without paying a gift or estate tax. By setting up a trust that is passed onto a beneficiary (which must be a family member), wealthy individuals can facilitate a considerable transfer of wealth without being subject to the normal tax penalties that apply to such transfers. If the individual dies before the GRAT’s term expires, the family member receives the remaining value of the trust. The bill would limit the use of these financial instruments by requiring a minimum 10-year terms for GRATS. Requiring  a 10-year minimum term would make GRATS a riskier option for older people who may not survive for a full decade. In other words, a 10-year GRAT requires far more financial risk than a two or three-year GRAT. Forbes’ Ashlea Ebeling explained the rationale this way: “The House bill would require a GRAT to last a minimum of 10 years. That increases the risk the person setting it up will die during the term of the GRAT, making GRATS less attractive for the older folks who typically set them up.”

Rep. Sander Levin (D-MI) the chairman of the committee that drafted the bill, urged members to support it: “ This bill, H.R. 5486, the Small Business Jobs Tax Relief Act of 2010, is, in a few words, a continuation of our work to spur job creation and to really improve the quality of life in all of our communities. Since the beginning of this year, our economy has created 982,000 jobs. That is a reversal of 22 straight months of job losses, a very long stretch indeed. But we all know that far too many people today are out of work and the unemployment rate remains at a very unacceptably high 9.7 percent. So something considerable has been done, but we have to do more.”

Rep. Richard Neal (D-MA) also urged support for the bill: “If you really care about small businesses and entrepreneurship and growing the economy, the essential argument here is how do we get these small business people back on their feet. The proposal here is to provide some tax relief. Greater lending possibilities with the prospect of encouraging small businesses to grow and invest is a very important part of what's incorporated in this very piece of legislation.”

Rep. Dave Camp (R-MI) argued the bill was fiscally irresponsible, and would fail to help small businesses: “…While the tax relief in here is welcome, it's not enough and won't actually help small businesses create the jobs we need to reduce our stubbornly high unemployment rate….this bill, like others before it, provides a stark reminder of the majority's view of the Ways and Means Committee as an ATM machine to fund other spending.”

House Minority Leader John Boehner argued that the bill was doomed to fail as long as a major health care law enacted in March 2010 remained in place: “…The bill before us today is supposed to be about helping small businesses. …Yet, if we really want this bill to work and if we really want small businesses to be able to begin hiring once again, what we really need to do is to repeal the job-killing health care law that was passed in this Chamber on March 21. The heart of that law is something that is called the ``individual mandate.'' The individual mandate forces Americans to buy health insurance whether they want to or not, whether they can afford it or not.”

The House passed the bill by a vote of 247-170. 242 Democrats and 5 Republicans voted “yea.”162 Republicans and 8 Democrats voted “nay.” As a result, the House passed legislation exempting income from investments in small businesses and restricting the use of granter retained annuity trusts.