WASHINGTON D.C. — On Thursday, Senate Majority Leader John Thune (R-SD) along with a bipartisan groups of 45 Senate colleagues, introduced legislation to permanently repeal the federal estate tax, more commonly known as the death tax.
The Death Tax Repeal Act would end this tax that can hit family-run farms, ranches, and businesses as the result of the owner’s death. The Senate bill also has a companion bill in the House led by led by Reps. Randy Feenstra (R-IA) and Sanford Bishop (D-GA).
“Family farms and ranches play a vital role in our economy and are the lifeblood of rural communities in South Dakota,” said Senator Thune. “Losing even one of them to the death tax is one too many. It’s time to put an end to this punishing, burdensome tax once and for all so that family farms, ranches and small businesses can grow and thrive without costly estate planning or massive tax burdens that can threaten their viability.”
“Small businesses are the lifeblood of Idaho’s economy, and family farmers, ranchers and entrepreneurs have often worked lifetimes to grow their businesses,” said Senator Mike Crapo (R-ID), chair of the Senate Finance Committee. “The death tax can be a devastating blow to American families who want to pass down their farm or small business to the next generation. It’s time to permanently provide relief from this unfair tax.”
The Death Tax Repeal Act legislation would permanently repeal the federal estate tax and generation-skipping transfer taxes, reduce the federal gift tax from 40 percent to 35 percent, and retain the full step-up in basis. Senator Kevin Cramer (R-ND) joined as one of the co-sponsors of the bill and said that “taxing the assets of people who have died is wrong on multiple levels, starting with the fact the same income is taxed twice, during life and after death. It’s hard to imagine a less moral government imposition than taxing death.”
The National Cattlemen’s Beef Association (NCBA) strongly supports the Death Tax Repeal Act. “The Death Tax isn’t pro-growth – it’s a death warrant for family businesses. It’s the top threat to the future of family farms and ranches, and U.S. cattle producers need relief from this insidious tax,” said NCBA President and Nebraska cattleman Buck Wehrbein. “Family-owned farms and ranches operate on limited cash flow, with most of their value tied up in land. As farmland and pastureland values rise, more producers will be hit with this punitive tax, forcing them to sell assets or take on debt, sometimes paying the Death Tax multiple times.”
In a recent NCBA tax survey, 33% of respondents had paid the tax, and 35% of them had paid it more than once according to Wehrbein who added that “his is not a tax on the rich, it is a boot on the neck of family businesses.”
Current Death Tax relief is set to expire at the end of 2025, and NCBA says it is vital that Congress acts soon to provide permanent relief for family operations. If the federal estate tax exemption reverts to pre-2017 limits, coupled with the rapid inflation of farmland values, many more families will be subject to the Death Tax.
Other agriculture stakeholders from across the country issued their support for the legislation as well. “South Dakota’s farmers and ranchers should not have to worry that their business will die with them because of the death tax,” said Scott VanderWal, president of the South Dakota Farm Bureau. “I thank Senator Thune for leading this important legislation in Congress and for his unwavering commitment to protect agricultural producers from this crippling tax burden and costly estate planning expenses.”
“Mom and pop business owners often spend a lifetime building a viable business that they can pass on to the next generation, but the estate tax presents a very real obstacle,” said Nathan Sanderson, executive director of the South Dakota Retailers Association. “Repealing the estate tax will provide peace of mind for hard-working families who want nothing more than to continue serving their communities for generations to come.”
The legislation is cosponsored by U.S. Sens. Jim Banks (R-Ind.), John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), John Boozman (R-Ark.), Katie Britt (R-Ala.), Ted Budd (R-N.C.), Shelley Moore Capito (R-W.Va.), John Cornyn (R-Texas), Tom Cotton (R-Ark.), Kevin Cramer (R-N.D.), Mike Crapo (R-Idaho), Ted Cruz (R-Texas), John Curtis (R-Utah), Steve Daines (R-Mont.), Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), Lindsay Graham (R-S.C.), Chuck Grassley (R-Iowa), Bill Hagerty (R-Tenn.), Josh Hawley (R-Mo.), John Hoeven (R-N.D.), Cindy Hyde-Smith (R-Miss.), Ron Johnson (R-Wis.), Jim Justice (R-W.Va.), John Kennedy (R-La.), James Lankford (R-Okla.), Mike Lee (R-Utah), Cynthia Lummis (R-Wyo.), Roger Marshall (R-Kan.), Mitch McConnell (R-Ky.), Dave McCormick (R-Pa.), Jerry Moran (R-Kan.), Bernie Moreno (R-Ohio), Markwayne Mullin (R-Okla.), Pete Ricketts (R-Neb.), Jim Risch (R-Idaho), Mike Rounds (R-S.D.), Eric Schmitt (R-Mo.), Rick Scott (R-Fla.), Tim Scott (R-S.C.), Tim Sheehy (R-Mont.), Thom Tillis (R-N.C.), Tommy Tuberville (R-Ala.), Roger Wicker (R-Miss.), and Todd Young (R-Ind.).