Republicans Push for Death Tax Repeal Act to Abolish Federal Inheritance Tax

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Republicans in Congress are making a bold move to abolish the federal inheritance tax, commonly known as the “death tax,” through the proposed Death Tax Repeal Act.

Key Insights

  • Over 170 House Republicans, led by Rep. Randy Feenstra, are pushing for the repeal of the federal estate tax.
  • The current estate tax affects estates worth approximately $13.9 million or more.
  • Republicans argue the tax unfairly impacts family farms and small businesses, describing it as “double taxation.”
  • A companion bill in the Senate, led by Majority Leader John Thune, has support from 44 senators.
  • The repeal effort coincides with attempts to extend the 2017 Tax Cuts and Jobs Act provisions.

Republicans Lead Charge to Eliminate “Death Tax”

In a significant legislative push, Republican lawmakers are rallying to repeal the federal inheritance tax, commonly referred to as the “death tax.” This initiative, spearheaded by Representative Randy Feenstra of Iowa, has garnered support from over 170 House Republicans, including Ways & Means Chairman Jason Smith. The proposed “Death Tax Repeal Act” aims to alleviate what Republicans perceive as an excessive financial burden on inherited estates, particularly affecting family-owned farms and businesses.

The federal estate tax currently applies to estates valued at approximately $13.9 million or more. However, Republicans argue that this threshold still poses a significant threat to the continuity of family-owned enterprises. The movement to repeal the tax has gained momentum, with a parallel effort in the Senate led by Majority Leader John Thune of South Dakota, supported by 44 senators.

Impact on Family Farms and Small Businesses

Proponents of the repeal emphasize the potentially devastating effects of the estate tax on family-run operations. Rep. Feenstra articulated the core argument against the tax, stating, “The death tax is an egregious double tax that unfairly targets American family farms and small businesses and directly threatens long-held farming traditions in rural Iowa and across the country. It is ridiculous that the federal government sends grieving families a massive tax bill when a loved one passes away.”

Senator John Thune echoed this sentiment, highlighting the vital role of family farms and ranches in the economy and rural communities. He argues that the loss of even one such enterprise to the death tax is unacceptable, advocating for a complete abolition of the tax to ensure the growth and sustainability of these businesses without the burden of costly estate planning or potentially crippling tax obligations.

Legislative Details and Support

The proposed legislation aims to fully repeal both the Estate Tax and the Generation-Skipping Transfer Tax (GSTT) while maintaining the step-up basis. This comprehensive approach has garnered support from a significant number of Republican legislators in both chambers of Congress. In the Senate, Senators Tom Cotton and John Boozman have joined Thune in reintroducing the legislation, emphasizing the importance of preserving family legacies and supporting local economies.

“Families shouldn’t have to sell major portions of their businesses or farms after the death of a parent just to afford the estate tax. Breaking apart a family’s livelihood is neither fair nor good for the economy. This legislation would end the federal death tax, making it much easier to preserve a family’s legacy and way of life.” Senator Cotton’s statement reflects the Republicans’ stance on the economic implications of the estate tax.

The push for repeal is timely, as it coincides with efforts to extend the 2017 Tax Cuts and Jobs Act, which doubled the estate tax exemption. If these tax cuts are not extended, the estate tax would apply to estates worth around $7 million or more starting in 2026, potentially affecting a broader range of Americans.

Looking Ahead

As the debate over the estate tax continues, Republicans are framing the repeal as a critical step in protecting family businesses and rural economies. While critics argue that the tax affects only a small percentage of wealthy estates, supporters of the repeal contend that its impact extends far beyond the immediate financial burden, threatening the very fabric of rural communities and family-owned enterprises across the nation.

The outcome of this legislative push remains to be seen, but it’s clear that the debate over the “death tax” will continue to be a significant point of contention in discussions about tax policy and economic fairness in the United States.

Sources:

  1. Inheritance tax hits chopping block as more than 200 Republicans push for repeal
  2. Cotton, Boozman, Thune Reintroduce Legislation to Repeal the Federal Death Tax
  3. Inheritance tax hits chopping block as more than 200 Republicans push for repeal

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