WASHINGTON, D.C.—U.S. Sen. Mike Johanns (R-Neb.) is cosponsoring legislation to permanently repeal the federal estate tax, commonly referred to as the death tax. The Death Tax Repeal Permanency Act was introduced by Sen. John Thune (R-S.D.) and currently has over 30 cosponsors.
“The loss of a family member should not be a taxable event, and Americans should not be forced to sell the family business, farm or ranch just to pay it,” Johanns said. “Nebraskans who have worked to create a better life for their children should be able to pass down the fruits of their labor without penalty.”
This legislation would repeal the estate and generation-skipping transfer taxes, currently set at a 35 percent tax rate with a $5 million exemption. Unfortunately, in 2013, the estate tax rate is scheduled to increase to 55 percent with a $1 million exemption.
According to a study by Douglas Holtz-Eakin, the former director of the non-partisan Congressional Budget Office, repealing the death tax could create 1.5 million additional small business jobs and decrease the national unemployment rate by nearly one percent.
This legislation is identical to legislation introduced in the House of Representatives by Rep. Kevin Brady of Texas.