Senate Republicans reintroduce bill to repeal the estate tax

Senate Republicans reintroduce bill to repeal the estate tax
© Stefani Reynolds

Senate Republicans on Monday announced that they are reintroducing legislation to repeal the federal estate tax.

The bill comes after the GOP tax law reduced the number of estates that would be subject to the tax but did not completely eliminate it.

The legislation was offered by Sen. John ThuneJohn Randolph ThuneSchumer blasts 'red flag' gun legislation as 'ineffective cop out' Lawmakers jump-start talks on privacy bill Trump border fight throws curveball into shutdown prospects MORE (R-S.D.), the number two Senate Republican, and is co-sponsored by more than two dozen others in the caucus, including Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellTwo years after Harvey's devastation, the wake-up call has not been heeded McGrath releases ad blasting McConnell with coal miners in Kentucky: 'Which side are you on?' Prediction: 2020 election is set to be hacked, if we don't act fast MORE (R-Ky.) and Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyThe road not taken: Another FBI failure involving the Clintons surfaces White House denies exploring payroll tax cut to offset worsening economy Schumer joins Pelosi in opposition to post-Brexit trade deal that risks Northern Ireland accord MORE (R-Iowa). Thune has repeatedly introduced legislation to repeal the estate tax.

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The bill is unlikely to become law in the next two years, since it would need 60 votes to pass the Senate and would be unable to pass the Democratic-controlled House. But by introducing the bill, Senate Republicans are able to highlight one of their longstanding tax priorities. 

The tax law that President TrumpDonald John TrumpGraham: America must 'accept the pain that comes in standing up to China' Weld 'thrilled' more Republicans are challenging Trump New data challenges Trump's economic narrative MORE signed in December 2017 did not repeal the estate tax but it doubled the amount that will be exempt from the tax. In 2019, the exemption amount for an individual is $11.4 million. The increase in the estate tax exemption amounts expires after 2025.

The Senate Republicans argued that repealing the estate tax, which they often call the "death tax," would be beneficial to owners of small businesses and family farms.

“Oftentimes, family-owned farms and ranches bear the brunt of this tax, which threatens families’ agricultural legacies and makes it difficult and costly to pass these businesses down to future generations," Thune said in a news release. "This way of life is integral to so many South Dakota families, which is why I remain committed to removing roadblocks for these family businesses, and we can start by repealing the death tax once and for all.”

Grassley said that "the estate tax doesn’t serve any purpose except forcing family farms and family-run businesses to waste precious capital on costly tax planning and in too many cases, paying taxes on income or property that have already been taxed once." 

But the bill is sure to be opposed by many Democrats, who argue that repealing the estate tax would help the rich and that very few taxpayers were subject to the tax even before the GOP tax law.

During the development of the 2017 tax law, moderate GOP Sen. Susan CollinsSusan Margaret CollinsAn ode to Joe Manchin's patriotism on his birthday Susan Collins challenger hit with ethics complaints over reimbursements Overnight Health Care: Insurance lobby chief calls Biden, Sanders health plans 'similarly bad' | Trump officials appeal drug price disclosure ruling | Study finds 1 in 7 people ration diabetes medicine due to cost MORE (Maine) also expressed opposition to fully repealing the estate tax. Collins is not a co-sponsor of Thune's bill.

The Urban-Brookings Tax Policy Center, whose director is a former Obama administration official, estimated that only about 80 small farms and small closely-held businesses paid the estate tax in 2017, and that those types of businesses would not be subject to the tax in 2018 because of the tax-law changes.