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 ThuneTelehealth is calling — will Congress pick up? GOP grows tired of being blindsided by Trump Hillicon Valley: Assange faces US charges after arrest | Trump says WikiLeaks 'not my thing' | Uber officially files to go public | Bezos challenges retail rivals on wages | Kremlin tightens its control over internet 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 McConnellThe Mueller report is a deterrent to government service Senate Republicans tested on Trump support after Mueller Anti-smoking advocates question industry motives for backing higher purchasing age MORE (R-Ky.) and Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyOn The Money: Inside the Mueller report | Cain undeterred in push for Fed seat | Analysis finds modest boost to economy from new NAFTA | White House says deal will give auto sector B boost The 7 most interesting nuggets from the Mueller report Government report says new NAFTA would have minimal impact on economy MORE (R-Iowa). Thune has repeatedly introduced legislation to repeal the estate tax.

ADVERTISEMENT

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 TrumpTrump calls Sri Lankan prime minister following church bombings Ex-Trump lawyer: Mueller knew Trump had to call investigation a 'witch hunt' for 'political reasons' The biggest challenge from the Mueller Report depends on the vigilance of everyone 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 CollinsSenate Republicans tested on Trump support after Mueller Collins: Mueller report includes 'an unflattering portrayal' of Trump GOP senator: 'No problem' with Mueller testifying 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.