Senate Majority Leader John Thune, R-S.D., and Sen. Steve Daines, R-Mont., along with 44 other senators have reintroduced the Death Tax Repeal Act, legislation to permanently repeal the federal estate and generation-skipping transfer taxes.
"Death should not be a taxable event," Thune said in a recent opinion piece posted on his website. "Anything you leave to your heirs has already been taxed once, and there should be a limit to how many times the government can tax you. Unfortunately, the estate tax, often called the death tax, is a concern for many American farmers, ranchers, and small business owners whose operations could be devastated by this tax. Eliminating the death tax once and for all has long been a priority of mine."
Thune continued that he was "proud to help secure a doubling of the death tax exemption in the 2017 Tax Cuts and Jobs Act, which has protected a lot of farms, ranches, and small businesses. But the larger exemption limit will expire at the end of this year, and it’s my hope that we will not merely extend the exemption, but that we will put an end to the death tax once and for all."
Daines added in a statement that he's “glad to join this effort to protect Montanans from this unfair and unnecessary tax.”
In December of 2017, Daines voted for the Tax Cuts and Jobs Act which he said "returned over $700 million to Montana families and doubled the exemption from the estate tax to $10 million for individuals and $20 million for families."
Daines told President Donald Trump in a Feb. 13 letter that he vowed to oppose any short-term tax bill.
In 2022, the most recent year with data available, 3,170 taxable estates filed returns, owing a net $22.5 billion in estate tax, according to the IRS.
The estate tax exemption will revert to pre-TCJA levels of $5 million per person after 2026. Because the level will be adjusted for inflation, it is expected that it will be around $7 million per person.
Because the estate tax "is a small, relatively inconsequential piece of the federal tax system," eliminating it "would lower taxes on the wealthiest Americans — but not by much," the Tax Foundation has argued. "Even if the estate tax were repealed, the federal tax system would still remain highly progressive."
Tax specialist Ed Slott of Ed Slott & Co. has maintained that the estate tax exemption will be high enough to shield well over 99% of taxpayers from this tax. "The real issue here is the income tax benefit, which is not mentioned" by Thune's statement, Slott told ThinkAdvisor when Thune first floated the bill in 2023.
"Most people (whose estate values are under the estate exemption amounts) will benefit more from the income tax benefit — the step-up in basis on appreciated assets like their home and stock portfolios," Slott pointed out.
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