New House Bill Would Permanently End The Death Tax

U.S. Reps. Randy Feenstra (R-Iowa) and Sanford Bishop (D-Ga.) have introduced legislation to permanently repeal the federal estate tax.

The two sponsors said the penalty, also known as the federal death tax, “imposes an unfair and costly tax on the transfer of property, land, and other assets from a deceased family member to heirs of family farms and small businesses.”

The Death Tax Repeal Act has strong bipartisan support from more than 160 original cosponsors. Similar legislation has been introduced in the U.S. Senate. The lawmakers are hoping to include the bill in a comprehensive tax package that may be considered later this year.

The Metals Service Center Institute and nearly 100 other organizations recently submitted a letter to Reps. Feenstra and Bishop supporting their bill. The letter, available here, noted several studies have quantified the potential job growth that would result from a permanent estate tax repeal. Last year, for example, the Tax Foundation found U.S. businesses would create more than 150,000 jobs if Congress ended the tax. A 2012 study by the House Joint Economic Committee concluded the death tax has destroyed more than $1.1 trillion of capital in the U.S. economy, which means fewer jobs and lower wages.

Lawrence Summers, former secretary of the U.S. Treasury under President Bill Clinton; Alicia Munell, a member of President Clinton’s Council of Economic Advisors; Joseph Stiglitz, a Nobel laureate for economics; and Douglas Holtz-Eakin, former Congressional Budget Office director have all published work on the death tax’s stifling effect on job and economic growth.

The letter also argued the “death tax forces family businesses to waste money on expensive insurance policies and estate planning” and “these burdensome compliance costs make it even harder for business owners to expand their businesses and create more jobs.”