Republican lawmakers are spearheading a significant effort to repeal the federal inheritance tax, commonly referred to as the 'death tax.'
Rep. Randy Feenstra, R-Iowa, is leading a coalition of over 170 House Republicans on the 'Death Tax Repeal Act,' with support from Ways & Means Chairman Jason Smith, R-Mo.
The inheritance or estate tax is imposed on beneficiaries who receive assets upon an individual's death. Critics, particularly Republicans, argue that the estate tax places an unnecessary financial burden on grieving families, especially impacting small family-owned businesses.
This move coincides with efforts to extend President Donald Trump’s 2017 Tax Cuts and Jobs Act, which is set to expire at the end of this year. One of the provisions expiring in 2026 is the doubling of the estate tax exemption.
Proponents of the federal estate tax note that it affects a relatively small number of estates, with penalties triggered for estates valued at around $13.9 million at the time of death, according to the latest IRS data.
In the Senate, Majority Leader John Thune, R-S.D., is leading a similar bill supported by 44 senators.
Feenstra and Thune argue that the estate tax is an unjust levy that disproportionately impacts family farms and small businesses in states like Iowa, South Dakota, and beyond.
Feenstra emphasized that the death tax represents a form of double taxation, while Thune highlighted the importance of family farms and ranches in rural economies.
If Republicans do not extend Trump’s tax cuts by the year's end, the estate tax would apply to estates valued at approximately $7 million or more, as per Modern Wealth Law.
A memo from House Ways & Means Committee Republicans warned that everyday American households could face tax increases exceeding 20% if the tax cuts expire.
Feenstra and Thune's bill aims to completely eliminate the estate tax.
