MSCI, Family Business Coalition Support Ending The Federal Death Tax

U.S. Sen. John Thune (R-S.D.) and a group of 40 colleagues have introduced the Death Tax Repeal Act of 2023, a bill that would permanently repeal the federal estate tax, more commonly known as the death tax, which affects family-run businesses as the result of the owner’s death.

Readers may recall that Sen. Thune led the U.S. Senate’s attempt to repeal the estate tax in 2017 when Congress considered the Tax Cuts of Jobs Act (TCJA). Although the final version of the TCJA did not repeal the death tax, the law effectively doubled the individual estate and gift tax exclusion to $10 million ($12.9 million in 2023 dollars) through 2025, which prevents more families and generationally-owned businesses from being affected by this tax.

The Metals Service Center Institute supports full repeal of the death tax and signed a letter with the Family Business Coalition supporting Sen. Thune’s legislation. That letter, available here, noted studies have quantified the potential job growth that would result from estate tax repeal. Last year, for example, the Tax Foundation found the United States could create more than 150,000 jobs by repealing the estate tax. A 2012 study by the House Joint Economic Committee found that the death tax has destroyed more than $1.1 trillion of U.S. small business capital, a fact that meant small businesses could not create as many jobs or raise wages.

The letter concluded, “The death tax is unfair. It makes no sense to require grieving families to pay a confiscatory tax on their loved one’s nest egg. Far too often this tax is paid by selling family assets like farms and businesses. Other times, employees of the family business must be laid off and payrolls slashed. No one should be punished for fulfilling the American dream.”

The coalition sent the letter the day before the National Association of Manufacturers released a survey that found 90 percent of manufacturers are worried about the threat of higher federal tax and regulatory burdens.