GOP Senators Make Repealing The Inheritance Tax A Legislative Priority
In a country of over 300 million people, one might think lawmakers would not grant priority status to repealing a tax paid by fewer than 2,000 of the wealthiest Americans each year, but Republican senators are preparing to do exactly that — they announced a plan on Monday to do away with the federal estate tax.
Senate Majority Leader Mitch McConnell (R-Ky.) joined Sens. Charles E. Grassley (R-Iowa) and John Thune (R-SD), members of the Senate Finance Committee, in releasing legislation to permanently repeal the federal estate tax, which conservatives refer to as “the death tax.”
The Republican tax law passed in 2017 already dramatically weakened the estate tax, allowing couples with $22 million to pass on their estates without facing the tax.
Only about 1,700 people are expected to pay the estate tax each year, according to Howard Gleckman, a tax expert with the nonpartisan Tax Policy Center.
Republicans have long eyed the estate tax for repeal, saying it unfairly taxes people who have “already paid taxes on assets at the time they were acquired”; however, Democrats see the tax as “necessary to bring in federal revenue and level the economic playing field.”
“On the right, death is not a taxable event, and the estate tax represents double taxation and an administrative headache,” said Brian Riedl, conservative economist at the Manhattan Institute, a right-leaning think tank. “On the left, the estate tax is a vital source of eliminating inequality. It’s a completely different framework.”
According to Americans for Tax Fairness, repealing the federal estate tax would deal a $225 billion blow to the federal budget over ten years.
The estate tax is paid by billionaires and millionaires — it is not a tax on the middle class. An estate needs to be worth more than $5 million before a dime of it gets taxed. Only 1 estate out of every 700 deaths pays any estate tax.
It would give huge tax breaks to those who need them the least — the wealthiest Americans.
The federal estate tax, also known as the inheritance tax, is primarily paid by the estates of multi-millionaires and billionaires before their assets are passed to their heirs. It was created nearly 100 years ago to raise revenue from those with the greatest ability to pay, encourage charitable giving and put a brake on the concentration of wealth and power. Conservatives call it the “death tax” in order to mislead people to believe that all Americans pay the tax.