Senator John Thune (R-SD) and Congressman Jason Smith (R-MO) are reintroducing the Death Tax Repeal Act (S. 617 & H.R. 1712).
Repeal of the Death Tax would spur economic growth, create jobs, and increase wages. The Death Tax Repeal Act has the support of Congressional leaders, such as Senate Republican Leader Mitch McConnell (R-Ky.), Finance Committee Ranking Member Mike Crapo (R-Idaho), and House Republican Ways and Means Leader Kevin Brady (R-Texas).
This legislation should be supported and co-sponsored by all members of Congress.
The Death Tax is fundamentally unfair and its bad tax policy. It is levied on assets that have been taxed previously through income taxes, capital gains taxes, and the corporate income tax.
It disproportionately impacts family-owned businesses like farmers and ranchers especially that tend to be asset rich but cash poor. On the other hand, the wealthy often evade the tax through loopholes and armies of lawyers and accountants.
The Tax Cuts and Jobs Act of 2017 made key progress toward repealing the Death Tax by doubling exemption from $5.5 million to $11 million. Unfortunately, because of arcane senate rules, this tax cut expires in 2025.
Moving forward, the Death Tax should be permanently repealed. While conservatives in Congress support repeal of the Death Tax, Democrats want to dramatically increase the size and scope of the Death Tax.
For instance, Senator Bernie Sanders (I-Vt.) has proposed nearly doubling the death tax to 77 percent in his new Estate Tax Plan, returning the death tax to levels unseen since the 1970s. President Joe Biden has expressed interest in reducing the current exemption for individual’s eligibility of transfer from $11.7 million to $3.5 million for estates.
Repealing the death tax would stimulate job creation and grow the economy. Numerous studies have found that repealing the death tax would grow the economy. For instance, a 2017 study by the Tax Foundation found that the US could create over 150,000 jobs by rolling back the estate tax.
Similarly, a 2012 study by the Joint Economic Committee found that the death tax has destroyed over $1.1 trillion of capital in the US economy, which results in fewer jobs and lower wages. Much of this economic damage hits small businesses, which are the core of America’s economy and have been disproportionately harmed by the Coronavirus pandemic. The economic growth created by repealing the Death Tax would produce $221 billion in federal revenue because of increased wages and more jobs.
The Death Tax is extremely unpopular. Numerous studies have found that majority of Americans oppose the Death Tax and support its repeal. For instance, a recent report by NPR found that 76 percent of Americans support full, permanent repeal of the Death Tax.
Repeal of the Death Tax would spur economic growth, create jobs, and increase wages. It would end double taxation and help family-owned businesses across the country.
Senator Thune and Congressman Jason Smith should be applauded for their reintroduction of the Death Tax Repeal Act and this legislation should be supported by Members of Congress.