WASHINGTON, March 28 - U.S. Senator John Thune (R-S.D.) today introduced the Death Tax Repeal Permanency Act to abolish the destructive federal estate tax. Representative Kevin Brady, R-Texas, introduced identical legislation in the House of Representatives last year and the bill currently has over 200 bipartisan cosponsors.
“The death of a loved one should not be a taxable event,” said Thune. “The federal government has no place being in the business of forcing grieving families to pay a tax on their loved one’s life savings that has been built from income already taxed when originally earned. Sadly, this tax is often paid by selling the family farm or life-long business. Other times, employees of the family business must be laid off and payrolls are slashed in order to pay the burdensome death tax. Let’s permanently repeal this punitive tax once and for all.”
“The death tax remains the number one reason family-owned businesses and farms can’t be passed down to their children. Reaching this important milestone of over 200 sponsors now shows overwhelming support for repealing this terrible tax,” Rep. Brady said in a statement.
America’s family businesses and farmers were spared from the burdensome federal estate tax in 2010, but unfortunately, this was only a short reprieve. Entrepreneurs are once again subject to this punitive tax, making planning and passing on farms and businesses to the next generation even more difficult.
For 2012, the $5 million lifetime gift and estate tax exemption limits will rise to $5.12 million–or $10.24 million per married couple because the exemptions are indexed for inflation. But, unless Congress acts, the gift and estate tax exemptions are both scheduled to revert to $1 million in 2013. The top estate tax rate will snap back to 55%, with a 5% surcharge on taxable estates of between $10 million and $17.184 million.
Not only would Thune’s bill repeal the federal estate tax, but it would also repeal the generation skipping transfer (GST) tax, make permanent the maximum 35 percent gift tax rate and a $5 million lifetime gift tax exemption, and maintain the stepped-up basis provisions important to family farms and businesses.
According to a recent study by Douglas Holtz-Eakin, the former director of the non-partisan Congressional Budget Office, repealing the death tax would create 1.5 million additional small business jobs and would decrease the national unemployment rate by nearly one percent.
Senator Thune’s legislation is supported by a wide variety of organizations, including American Conservative Union, American Family Business Institute, Americans for Prosperity, Americans for Tax Reform, Club for Growth, Farm Bureau, Heritage Action for America, Hispanic Leadership Fund, National Black Chamber of Commerce, National Federation of Independent Business, National Taxpayers Union, and the U.S. Chamber of Commerce.
Cosponsors of the legislation include: Senators Marco Rubio (R-Fla.), John Boozman (R-Ark.), John Barrasso (R-Wyo.), Roy Blunt (R-Mo.), John Cornyn (R-Texas), Mike Crapo (R-Idaho), Michael Enzi (R-Nev.), Charles Grassley (R-Iowa), Dean Heller (R-Nev.), James Inhofe (R-Okla.), Johnny Isakson (R-Ga.), John Kyl (R-Ariz.), Mike Lee (R-Utah), Richard Lugar (R-Ind.), John McCain (R-Ariz.), Mitch McConnell (R-Kent.), Jerry Moran (R-Kan.), Rand Paul (R-Kent.), Pat Roberts (R-Kan.), and David Vitter (R-La.).
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