Legislation reintroduced by Rep. Jodey Arrington, R-Texas, chairman of the House Budget Committee, would set an estate, gift and generation-skipping transfer tax rate of 20%, which would "dramatically drop the costs of passing assets on to the next generation," according to Jeff Bush of The Washington Update.
"While this would be a significant drop in the rate, it would not substantially reduce the federal government's tax revenue," Bush said. "The revenue generated by these events is a minimal portion of the approximate $5T in revenue the service collects each year."
The estate tax exemption currently stands at $13.99 million per individual, but is scheduled to revert at the end of 2025 to its pre-2017 level, adjusted for inflation — an estimated $7 million per individual. The maximum federal estate tax rate will remain 40%.
Arrington's bill, H. R. 601, applies to generation-skipping transfers, gifts made, and estates of decedents dying after Dec. 31, 2024.
The bill "would perpetuate the Democrats’ argument that the tax reform effort unfairly benefits the wealthy," Bush added, and "would substantially benefit those trying to pass illiquid assets like intact businesses and farms to the next generation."
During his 2024 campaign, President Donald Trump floated the idea of eliminating the estate tax, Bush continued.
"It’s doubtful an elimination is fiscally possible with the limited majority the GOP has in the 119th Congress," he said.
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