Estate plan

Three GOP senators reintroduced legislation Monday to permanently repeal the federal estate tax.

Sens. John Thune, R-S.D., and Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee, along with Senate Majority Leader Mitch McConnell, R-Ky., joined a dozen other Senate Republicans to introduce The Death Tax Repeal Act of 2019.

Thune, the original sponsor of the bill, led the Senate’s efforts to repeal the estate tax in the sweeping tax overhaul passed in 2017.

While the tax law did not repeal the estate tax, the law doubled the individual estate and gift tax exclusion to $10 million ($11.4 million in 2019 dollars) through 2025.

In reintroducing the bill, Thune said that “although we made great progress during the Tax Cuts and Jobs Act negotiations, the death tax still remains an onerous and unfair tax that punishes hardworking families.”

McConnell added in the statement that “our historic tax reform legislation provided major relief from this burden to many Kentuckians — especially those in farming and rural communities. Now is the time for our Democratic colleagues to join us to take the next step to repeal the death tax once and for all.”

But winning over Senate and House Democrats is an uphill battle.

Shai Akabas, director of economic policy at the Bipartisan Policy Center, told ThinkAdvisor in an email message that the GOP bill “is likely to be a nonstarter with Democrats since it would double down on one of the policies in the 2017 tax cut that not a single Democrat voted for.”

If policymakers want to reduce taxes on couples with estates of over $22 million, Akabas continued, “they need to think about who will ultimately foot that bill in the future.”

According to the Congressional Budget Office, Akabas added, “the estate tax is projected to annually bring in $27 billion per year. Even if that was paid for by making every single taxpayer contribute more — from those under the poverty line all the way up to the top one percent — taxes would need to rise by about $150 per household. I doubt the average American wants to pay that to give multimillionaires bigger inheritances.”