Senate Majority Leader Mitch McConnell, R-Ky., Sen. John Thune, R-S.D., Sen. John Hoeven, R-N.D., and Sen. Mike Crapo, R-Idaho, led a coalition of Republican senators this week in reintroducing legislation to permanently repeal the federal estate tax, which they call the death tax.
“It's important that the federal estate tax is repealed once and for all and we don't make it harder for farms and businesses to stay in the family,” Hoeven said in a news release. “Estate planning and ensuring the future operations of a farm or small business are difficult enough, and the death tax only makes these decisions more challenging.”
Rep. Jason Smith, R-Mo., and House Agriculture Appropriations Subcommittee Chairman Sanford Bishop, D-Ga., have introduced a bill in the House to repeal the estate tax, which they call the death tax.
“The last thing grieving Americans need is to be punished for their family's hard work in building successful farms, ranches, and small businesses that feed the world and drive our economy,” Smith said in a news release. “Repealing the death tax is a necessary step towards ensuring the future for family-owned farms and small businesses for generations to come and helps them carry on their family's legacy.”
Bishop stated, “I have always believed that the death tax is politically misguided, morally unjustified, and downright un-American. It undermines the life work and the life savings of farmers and small- and medium-sized businesses in Georgia and across the nation. It is high time that we put an end to this unfair tax and pass this important legislation.”
Despite Bishop's support, a repeal of the estate tax is unlikely during under a Democratic-led Congress. Republicans also had an opportunity to eliminate the estate tax in 2017 but declined to do so because of the long-term projected budget impact.
The 2017 Tax Cuts and Jobs Act did temporarily double the estate tax exemption to $11 million per person indexed for inflation through 2025, which puts the exemption per person at $11.7 million for 2021. Without further congressional action, the estate tax exemption will revert to $5.5 million per person in 2026.
The bill is supported by the American Farm Bureau Federation, the National Cattlemen's Beef Association, the National Federation of Independent Business, the National Association of Manufacturers, the Family Business Coalition, the Family Business Estate Tax Coalition, the Policy and Taxation Group, the Associated General Contractors of America, the National Taxpayers Union and others.
IRS data on estate taxes from 2019, the most recent year available, show 2,570 estates paid the estate tax with gross estate assets of $77.3 billion. The bulk of assets taxed in estates -- $43.16 billion in 2019 – were stocks, bonds and cash. The IRS shows 269 estates nationally that paid the tax in 2019 listed farm assets totaling $1.33 billion. Another 595 estates that paid the tax in 2019 also reported $1.14 billion in art assets.
In addition to Hoeven, Thune, McConnell and Crapo, the Death Tax Repeal Act of 2021 is co-sponsored by Republican Sens. Kevin Cramer of North Dakota, John Barrasso of Wyoming, Marsha Blackburn of Tennessee, Roy Blunt of Missouri, John Boozman of Arkansas, John Cornyn of Texas, Tom Cotton of Arkansas, Ted Cruz of Texas, Steve Daines of Montana, Joni Ernst of Iowa, Deb Fischer of Nebraska, Chuck Grassley of Iowa, James Inhofe of Oklahoma, John Kennedy of Louisiana, Roger Marshall and Jerry Moran of Kansas, Jim Risch of Idaho, Mike Rounds of South Dakota, Marco Rubio and Rick Scott of Florida, Richard Shelby of Alabama and Roger Wicker of Mississippi.
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