January 24, 2017, Washington DC- H.R.198 – Death Tax Repeal Act of 2017 was introduced by Rep. Mac Thornberry (R-TX-13), House Ways & Means Committee. Sen. John Thune (R-SD), member of the tax-writing Senate Finance Committee, reintroduced legislation to permanently repeal the federal estate tax, better known as the death tax.
In the proposed legislation the estate tax is levied on the net value – less an exemption – of an owner’s assets transferred at death to an heir or heirs. For the 2016 tax year, the exemptions for the estate tax is $5.45 million for an individual and $10.9 million for couples. Transferred estates valued at more than those figures are subject to a maximum tax rate of 40 percent on the amount of assets above those levels.
Thune said, “In an environment where it’s frequently too difficult and costly for family-owned farms to be passed from one generation to the next, we should be knocking down hurdles to find ways to incentivize families to retain these multi-generation businesses. Repealing the death tax would be a big step in the right direction. I’m committed to working as hard and as long as it takes to get rid of this onerous tax, and I’m glad so many of my colleagues are willing to take up this fight as well.”
According to Congress’s Joint Economic Committee, for every $1 of tax revenue raised from the estate tax, which accounts for less than 1 percent of federal revenues, $1 is wasted in compliance and tax planning costs. A 2015 study from the Tax Foundation found that repealing the estate tax would “gradually increase U.S. capital stock by 2.2 percent, boost GDP, create 139,000 jobs and eventually increase federal revenue.”