House Expected to Vote to Repeal Estate TaxApril 15, 2015
On Thursday, the House is expected to vote on the Death Tax Repeal Act of 2015 (H.R. 1105), which would permanently repeal the estate tax and the generation-skipping transfer taxes and makes permanent the maximum 35 percent gift tax rate and lifetime gift tax exemption. It also provides for an inflation adjustment to such exemption amount.
Introduced by Reps. Kevin Brady (R-Texas) and Sanford Bishop (D-Ga.) on Feb. 26, the measure sailed through the Ways and Means Committee on March 25. This will be the first House vote on stand-alone repeal legislation since 2005 and a major milestone in returning the issue of estate tax repeal back to the forefront of the tax policy debate.
Federal estate and gift taxes harm family-owned businesses on an ongoing basis because the owner of the business must take various—and often very costly—estate planning measures such as purchasing insurance and/or the creation of trust funds to ensure the future viability of the business. If families do not take these steps, they may have to liquidate the business to pay the estate taxes. The ongoing uncertainty of the estate tax has resulted in more confusion, complexity and estate planning costs for small businesses.
Until 2012, estates paid a 35 percent estate tax with a $5 million exemption. The tax was scheduled to revert in 2013 to 2001 levels, with only a $1 million exemption and a 55 percent tax rate. However, the current top rate for the estate tax, 40 percent, was put into the place by the fiscal cliff measure—the American Taxpayer Relief Act—signed into law more than two years ago. Individuals now have an indexed $5.43 million exemption for the tax, with married couples getting $10.86 million.
This will be the first time in ten years that Congress has considered legislation to fully repeal the estate tax, and there are over 250 current members who have never cast a vote on repeal legislation.
NSBA supports H.R. 1105, please click here to read the letter of support. Lawmakers need to hear from the family-owned business community about the effects the estate tax has on your business, please urge support on the House floor.