A trio of Republican senators has reintroduced legislation to permanently repeal the estate tax.
The estate tax was originally on the chopping block during negotiations over the Tax Cuts and Jobs Act, but instead the TCJA doubled the exemption amount for estates subject to the tax from $5 million to $10 million, indexed for inflation. For 2018, the exemption amount is $11.18 million for single taxpayers, or $22.36 million for couples. Only 5,000 families were expected to file estate tax returns last year after the TCJA passed, and only about 1,700 are expected to pay taxes annually, according to estimates from the Tax Policy Center and the American College of Estate and Trust Counsel.
The Death Tax Repeal Act of 2019 was introduced Monday by Sen. John Thune, R-S.D., a member of the tax-writing Senate Finance Committee, along with Senate Majority Leader Mitch McConnell, R-Ky., Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee.
Thune led efforts to repeal the estate tax during deliberations over the TCJA in 2017. “Although we made great progress during the Tax Cuts and Jobs Act negotiations, the death tax still remains an onerous and unfair tax that punishes hard-working families,” he said in a statement. “Oftentimes, family-owned farms and ranches bear the brunt of this tax, which threatens families’ agricultural legacies and makes it difficult and costly to pass these businesses down to future generations. This way of life is integral to so many South Dakota families, which is why I remain committed to removing roadblocks for these family businesses, and we can start by repealing the death tax once and for all.”
The bill is supported by the American Farm Bureau Federation, the National Cattlemen’s Beef Association, the National Federation of Independent Business, the Associated General Contractors of America, the Family Business Estate Tax Coalition, Policy and Taxation Group, the National Association of Manufacturers, and other groups. It comes at a time when Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y., have issued separate proposals to increase taxes on high-income Americans.
Morris Pearl, former managing director at BlackRock, Inc., and chair of the advocacy group the Patriotic Millionaires, criticized the bill introduced by Thune, McConnell and Grassley. “Who in the world could look at this country and think that giving more money to the heirs of multi-million dollar fortunes is our most urgent and pressing need?” he said in a statement. “The estate tax affects less than 2,000 families each year, and even with the tax, those heirs are able to inherit over $22 million completely tax free. Meanwhile, nearly 100 million Americans live in or near poverty, and 40 percent of working Americans make less than $15 an hour.”
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