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

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Republicans rally to abolish the federal inheritance tax, sparking debate over its impact on family businesses and farms.

Key Takeaways

  • Over 170 House Republicans are backing the “Death Tax Repeal Act” to eliminate the federal estate tax.
  • The current estate tax affects estates worth $13.9 million or more, but this threshold could decrease to $7 million if 2017 tax cuts expire.
  • Supporters argue the tax unfairly burdens grieving families and threatens family-owned farms and businesses.
  • Critics contend the tax only impacts a small percentage of wealthy estates.
  • The repeal effort is part of a broader push to extend the 2017 Tax Cuts and Jobs Act provisions.

Republicans Unite to Repeal “Death Tax”

In a significant push to reshape tax policy, Republican lawmakers have launched a concerted effort to repeal the federal inheritance tax, commonly known as the “death tax.” Representative Randy Feenstra of Iowa is spearheading this initiative in the House, with the backing of over 170 Republican colleagues, including influential figures such as Ways & Means Chairman Jason Smith. This move aligns with the GOP’s long-standing goal of reducing tax burdens on American families and businesses.

The “Death Tax Repeal Act” aims to eliminate what Republicans view as an unjust financial burden on grieving families, particularly those inheriting small family-owned farms and businesses. Critics of the current estate tax system argue that it forces families to make difficult decisions about selling off parts of their inheritance to cover the tax liability, potentially disrupting long-established family enterprises.

Impact on Family Farms and Businesses

Supporters of the repeal emphasize the potential negative effects of the estate tax on rural communities and family-owned enterprises. Senator John Thune, who is leading a parallel effort in the Senate with 44 co-sponsors, has been vocal about the tax’s impact on agricultural families.

“Family farms and ranches play a vital role in our economy and are the lifeblood of rural communities in South Dakota. Losing even one of them to the death tax is one too many. It’s time to put an end to this punishing, burdensome tax once and for all so that family farms, ranches and small businesses can grow and thrive without costly estate planning or massive tax burdens that can threaten their viability.” – John Thune

The current estate tax applies to estates valued at approximately $13.9 million or more. However, this threshold is set to decrease to around $7 million if the tax cuts implemented in 2017 are not extended, potentially affecting a broader range of families and businesses.

Legislative Efforts and Support

The push for repeal is not limited to the House. In the Senate, Majority Leader John Thune, along with Senators Tom Cotton and John Boozman, has reintroduced legislation to eliminate the federal estate tax. This bill has garnered support from 45 Senate Republican colleagues, demonstrating a unified front in the GOP’s tax reform agenda.

“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.” – Rep. Randy Feenstra

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 approach is designed to provide comprehensive relief to families facing potential tax burdens upon inheriting businesses or properties.

Economic Implications and Debate

While proponents of the repeal argue that it will protect family legacies and stimulate economic growth, critics contend that the estate tax affects only a small percentage of the wealthiest Americans. The debate highlights the ongoing discussion about tax fairness and the role of inheritance in perpetuating or addressing wealth inequality.

As the 2026 expiration date for the current estate tax exemptions approaches, the Republican-led effort to repeal the “death tax” is likely to intensify. The outcome of this legislative push could have significant implications for estate planning, family businesses, and the broader landscape of American tax policy.

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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