Estate Tax Repeal Introduced in Senate

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Estate Tax Repeal Introduced in Senate

Some call it the estate tax. Others label it the death tax. Whatever name it goes by, the federal tax levied on the transfer of someone’s estate after death a popular topic of discussion in Congress. There has long been a move to repeal it, and legislation will continue that effort during the new session of Congress.

 

Senator John Thune (R-SD) has introduced S. 215, a bill to repeal the estate tax. Twenty-eight senators, all Republicans, have cosponsored it. The current estate tax rate is 40%. The 2017 tax cut legislation raised the amount of an estate that is exempt from this tax to $11.4 million for individuals.

 

When Republicans took control of Congress after the 1994 election, repeal of the estate tax (which they labeled as the “death tax”) was a top priority. The tax cut legislation signed into law by George W. Bush phased out the estate tax, and eliminated it entirely for one year. When those tax cuts expired, however, the federal estate tax came back, too. Farmers have pushed hard for a repeal, saying that the estate tax forces them to break up their farms or go through costly planning to structure their farms to avoid the tax.

 

Supporters of repealing the estate tax point to studies showing that it harms economic growth. They note that it taxes income twice – once when it’s earned and again when it is passed to heirs. They also contend that the tax is easily avoided if people structure their estates in the right way, but that this avoidance is costly and harmful to the economy. Opponents of a repeal say that it helps stop the accumulation of wealth from being passed from generation to generation, something that entrenches income inequality.

 

Do you think that the estate tax should be repealed?

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