Republican Push for Death Tax Repeal Act to Eliminate Federal Inheritance Tax

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In a bold move against what they call “double taxation,” Republicans are pushing to eliminate the federal inheritance tax, sparking a heated debate on economic fairness and family legacies.

Key Takeaways

  • Over 170 House Republicans are backing the “Death Tax Repeal Act” to eliminate the federal inheritance tax.
  • The current estate tax affects estates worth $13.9 million or more, but could apply to $7 million estates if 2017 tax cuts expire.
  • Republicans argue the tax unfairly burdens grieving families, especially those with small businesses and farms.
  • A companion bill in the Senate, supported by 45 Republican senators, aims for complete repeal of the estate tax.
  • Critics view the repeal as a tax break for the wealthy, while supporters see it as protection for family legacies.

Republicans Rally Against the “Death Tax”

In a sweeping effort to reshape tax policy, Republican lawmakers are mounting a significant push to repeal the federal inheritance tax, commonly known as the “death tax.” Spearheaded by Rep. Randy Feenstra (R-Iowa) and backed by over 170 House Republicans, including Ways & Means Chairman Jason Smith, the “Death Tax Repeal Act” aims to eliminate what they view as an unfair burden on American families.

The estate tax currently affects only the wealthiest Americans, applying to estates valued at $13.9 million or more. However, Republicans argue that this tax disproportionately impacts family-owned farms and small businesses, forcing some families to sell off parts of their legacy to meet tax obligations.

The Economic and Emotional Toll of Inheritance Taxes

Proponents of the repeal emphasize the emotional and financial strain the tax places on grieving families. Rep. Feenstra, leading the charge in the House, doesn’t mince words about the impact of the current system.

“The death tax is an egregious double tax that unfairly targets American family farms and small businesses and directly threatens long-held farming traditions in rural Iowa and across the country. It is ridiculous that the federal government sends grieving families a massive tax bill when a loved one passes away.” – Rep. Randy Feenstra

This sentiment is echoed in the Senate, where a companion bill led by Majority Leader John Thune (R-S.D.) has garnered support from 44 senators. The proposed legislation seeks to abolish not only the estate tax but also the Generation-Skipping Transfer Tax (GSTT), while maintaining the step-up basis.

A Race Against Time and Tax Cuts

The push for repeal comes at a critical juncture, as provisions from the 2017 Tax Cuts and Jobs Act are set to expire in 2026. If these cuts are not extended, the estate tax threshold would drop to around $7 million, potentially affecting a broader swath of American families. House Ways & Means Committee Republicans have sounded the alarm, warning that American households could face tax increases of over 20% if the cuts expire.

“Family farms and ranches play a vital role in our economy and are the lifeblood of rural communities in South Dakota. Losing even one of them to the death tax is one too many. It’s time to put an end to this punishing, burdensome tax once and for all so that family farms, ranches and small businesses can grow and thrive without costly estate planning or massive tax burdens that can threaten their viability.” – John Thune

The Republican argument centers on the idea that the estate tax represents a form of double taxation, hitting assets that have already been taxed during the owner’s lifetime. They contend that this not only places an undue burden on families but also threatens the continuity of small businesses and farms that form the backbone of rural America.

Controversy and Opposition

While Republicans frame the repeal as a protection for family legacies and small businesses, critics argue that it primarily benefits the wealthiest Americans. The current high threshold for the estate tax means that only a small percentage of estates are actually subject to it. Opponents of the repeal view it as a tax break for the rich that could exacerbate wealth inequality.

As the debate rages on, the fate of the “Death Tax Repeal Act” remains uncertain. With a divided Congress and competing priorities, the path to repeal is fraught with political challenges. However, for Republican lawmakers and their supporters, the fight against the estate tax is about more than just dollars and cents—it’s about preserving a vision of American entrepreneurship and family legacy for generations to come.

Sources:

  1. Inheritance tax hits chopping block as more than 200 Republicans push for repeal
  2. Cotton, Boozman, Thune Reintroduce Legislation to Repeal the Federal Death Tax
  3. Inheritance tax hits chopping block as more than 200 Republicans push for repeal

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