What Lawmakers Are Saying About the Future of Estate Tax
Introduction:
The Estate Tax, commonly known as the "death tax," has been a topic of controversy for years. Currently, the federal estate tax applies to estates valued over $11 million for individuals and $22 million for couples. This tax is imposed on the transfer of property and assets at the time of death and can lead to significant tax liabilities for heirs. The debate surrounding the legislation has prompted lawmakers to express their opinions on the future of the Estate Tax, some advocating for its repeal, some pushing for reform, and others defending its necessity. In this article, we will examine what lawmakers are saying about the future of the Estate Tax.
Arguments for Repeal:
Many lawmakers and tax experts support the repeal of the Estate Tax, arguing that it is a burdensome tax that affects too few households. They contend that the tax places a significant burden on family-owned businesses and farms, who must liquidate assets to pay the tax. Additionally, they argue that the Estate Tax is a form of double taxation since the assets have already been taxed throughout the individual's lifetime.
- Senator John Thune of South Dakota introduced a bill in 2019 that would repeal the estate tax entirely. Thune argued that the Estate Tax is "a direct threat to many family-owned farms and small businesses in South Dakota."
- Representative Jason Smith of Missouri has also been a vocal advocate for the repeal of the Estate Tax. Smith argued that the tax "punishes hardworking taxpayers for their success."
Arguments for Reform:
Other lawmakers and tax experts argue for reforming the Estate Tax instead of repealing it. They contend that the tax provides an important revenue stream for the federal government and should be reformed to ensure fairness and prevent loopholes in the system.
- Senator Bernie Sanders of Vermont has introduced legislation that would significantly reform the Estate Tax. Sanders' bill would lower the exemption threshold, increase the tax rate, and close various loopholes currently available to wealthy taxpayers. Sanders argues that reforming the Estate Tax is necessary to ensure that the wealthiest individuals pay their fair share.
- Representative Earl Blumenauer of Oregon introduced a bill in 2019 that would change the basis of the Estate Tax from the value of the assets at the time of death to the value at which the assets were purchased. Blumenauer's bill would prevent wealthy individuals from avoiding paying taxes on the increase in the value of their assets by holding onto them until death.
Arguments for Keeping the Estate Tax:
Despite opposition to the Estate Tax, others argue that it serves an essential purpose and should be kept in place. They point out that the tax affects only the wealthiest households and generates significant revenue for the federal government.
- Senator Elizabeth Warren of Massachusetts has been a vocal advocate of the Estate Tax, calling for an increase in rates and a lowering of the exemption threshold. Warren argues that the Estate Tax is "the best tool we have to curb the concentration of wealth and power in our country."
- Representative Lloyd Doggett of Texas introduced legislation in 2019 that would lower the exemption threshold to $3.5 million for individuals and increase the tax rate to 45 percent. Doggett argues that the Estate Tax is necessary to ensure that the wealthiest Americans pay their fair share.
Conclusion:
The future of the Estate Tax remains uncertain, with lawmakers on both sides of the debate arguing for either repeal, reform, or retention. While some argue that the Estate Tax is a burdensome and unfair tax, others contend that it is a necessary tool to ensure that the wealthiest Americans pay their fair share. What is clear is that the debate over the future of the Estate Tax is unlikely to end anytime soon, and lawmakers will continue to push for changes to the law in the years to come.