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house Bill H.R. 631

Should the "Death Tax" and Generation-Skipping Transfer Tax be Repealed?

Argument in favor

Why should death or gifts from grandparents to their grandchildren be taxable events? These people already paid taxes on that money when they first earned it, taxing it again at a person’s death is not only insulting, it's double-taxation.

Abbie's Opinion
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04/18/2017
That money has already been taxed as income, and will be taxed again when it is spent by the inheritors. There is no need to tax it a third time.
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Melissa's Opinion
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04/18/2017
So many people think it would be unfair if it applied to them, but because it only affects the wealthy, they are all for it. It was already taxed once, and it will be taxed again when it is spent. Although I am not among the wealthy, I am able to see that is unfair to tax it a third time.
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Derek's Opinion
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04/18/2017
It's unfair to pay taxes on the same money twice.
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Argument opposed

The people who pay these taxes are the wealthiest in the country — they can afford it. Not to mention, the tax only applies to about 2 of every 1,000 estates. The government does not need to be giving the Paris Hiltons of the world a $269 billion gift.

Miranda's Opinion
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04/18/2017
The so-called "death tax" currently applies only to estates worth more than $5 million. Republicans need to stop deceiving people about a tax that affects only a very small number of Americans. It is not unreasonable for the most fortunate few to forego a portion of their unearned riches for the benefit of the many who have not been born into wealthy families.
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Nicole's Opinion
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04/18/2017
Look carefully at who is affected. $5 million is the threshold. Yeah....no, it doesn't need to be repealed.
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Melinda's Opinion
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04/18/2017
Leave estate taxes in place where they are. Wealth accumulated over millions of dollars is wealth not being reinvested in our society and should not just be left to roll along generation to generation without taxation. If we had a $0 deficit and excellent infrastructure perhaps it could be reconsidered but right now leave the "death tax" in place.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedJanuary 24th, 2017

What is House Bill H.R. 631?

This bill would eliminate the estate tax — a tax on the ability of a dead person to transfer their property at their death — and the generation-skipping transfer tax, which taxes gifts from dead people to their grandchildren. These taxes would be abolished as soon as this legislation is enacted.

It would also reduce the top rate on gift taxes from 40 percent to 35 percent on gifts of $500,000 or more. A lifetime gift tax exemption would be calculated by increasing $5,000,000 annually by the amount of inflation since 2010 to adjust for increases in the cost of living.

Transfers involving trusts would be treated as a taxable gift unless the trust is wholly owned by the donor or the donor’s spouse.

Currently, individuals are exempt from the estate tax if their assets are less than $5.43 million, while the limit for married couples is $10.86 million, with the top tax rate on income above those levels being 40 percent.

Impact

People who would otherwise be subject the estate tax, the generation-skipping transfer tax, or the gift tax as they are currently structured, and the IRS.

Cost of House Bill H.R. 631

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Rep. Kristi Noem (R-SD) introduced this bill and spoke of her personal experience with the effects of the so-called death tax as motivating her to work toward its repeal:

"While we were still trying to pick up the pieces after my dad died in a farm accident, our family received a letter from the IRS.  Because of a tragedy that undermined our sense of security, the death tax was now about to undermine our financial security. No family should have to go through what ours did, so I'm committed to seeing this tragedy tax finally repealed."

nearly identical version of this bill was introduced in June 2013, but failed to receive a vote in the House before the end of the 113th Congress. During the 114th Congress the legislation fared better, passing the House on a 240-179 vote before ultimately stalling in the Senate.

Currently, this legislation has the support of 69 cosponsors in the House, including 68 Republicans and one Democrat.


Of Note: Former Director of the Congressional Budget Office (CBO) Douglas Holtz-Eakin, produced a study in 2009 that estimated a repeal of the estate tax would lead to the creation of 1.5 million jobs, reduce the 2009 unemployment rate by nearly a full percentage point, and increase the amount of capital available to small business by over $1.6 trillion.

Farms are particularly likely to being hit hard by the estate tax, as a 1999 study by the CBO found that 12 percent of farms had estate tax bills that exceeded their liquid assets.

Senate Majority Leader Mitch McConnell (R-KY) has said of the estate tax that

“It is the federal government’s final insult to tax your family when you have already paid taxes on your property throughout your life. The thought of having to visit the IRS and the undertaker on the same day is an absolute outrage.”

Proponents of the estate tax believe that it fairly taxes the richest Americans, with some pointing out that only 2 out of every 1000 estates face the estate tax. They also note that the effective estate tax rate is actually closer to 17 percent than the 40 percent marginal rate. A writer for the Washington Post referred to the proposal as a “$246 billion gift to the Paris Hiltons of the world over the next decade.”


Media:

Summary by Eric Revell

(Photo Credit: National Archives / Public Domain)

AKA

Death Tax Repeal Act of 2017

Official Title

To amend the Internal Revenue Code of 1986 to repeal the estate and generation-skipping transfer taxes.

    That money has already been taxed as income, and will be taxed again when it is spent by the inheritors. There is no need to tax it a third time.
    Like (158)
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    The so-called "death tax" currently applies only to estates worth more than $5 million. Republicans need to stop deceiving people about a tax that affects only a very small number of Americans. It is not unreasonable for the most fortunate few to forego a portion of their unearned riches for the benefit of the many who have not been born into wealthy families.
    Like (526)
    Follow
    Share
    Look carefully at who is affected. $5 million is the threshold. Yeah....no, it doesn't need to be repealed.
    Like (190)
    Follow
    Share
    So many people think it would be unfair if it applied to them, but because it only affects the wealthy, they are all for it. It was already taxed once, and it will be taxed again when it is spent. Although I am not among the wealthy, I am able to see that is unfair to tax it a third time.
    Like (126)
    Follow
    Share
    Leave estate taxes in place where they are. Wealth accumulated over millions of dollars is wealth not being reinvested in our society and should not just be left to roll along generation to generation without taxation. If we had a $0 deficit and excellent infrastructure perhaps it could be reconsidered but right now leave the "death tax" in place.
    Like (125)
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    Share
    There is no "death tax" the estate tax is charged because the income is new to you. The tax is charged against the receiver of the income... just like tax is charged every other time someone receives income. This is just income tax. Stop being puppets
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    Stop giving tax breaks to the wealthiest people of the country
    Like (92)
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    It's unfair to pay taxes on the same money twice.
    Like (80)
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    This tax only applies to the wealthy. Repealing it reduces tax revenue but does nothing to create jobs or stimulate economic growth.
    Like (68)
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    Another tax gift to those who don't need it
    Like (64)
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    The founding fathers strongly supported inheritance taxes to guard against the rise of an American aristocracy and we are very nearly there again. I think the current cut off of $5 million is perfectly acceptable.
    Like (63)
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    People saying "no" are all making the "screw rich people" argument. No mention of the fact that the money was already taxed the first time, the fact the the person who earned it has a right to dispose of it how they see fit, or the fact that the government, in taxing an estate, is just taking money that it DID NOT earn and will ultimately just squander.
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    The 1% already don't pay their way. This is another tax break for them.
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    No! The argument that some are making that the money has already been taxed falls apart when you realize all money is already taxed on some level prior to transfer. The other argument that business or property cannot be inherited without taxation; there are ways to facilitate transfers without taxation. And please stop calling it a death tax! It is an inheritance tax for only very large inheritances intended to prevent the development of an American aristocracy. Lastly the tax in 2016 was only 40% for amounts greater than $5.45 million. If you are fortunate enough to inherit that much ... good on you. If you inherit $100 million you only have to pay 37.8 million. You have zero to complain about to pay that little amount for the benefits you receive in this country.
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    You save your money for retirement with a hope that yours kids may benefit if money is left after death. But Socialism knows best- spreading your wealth around to make life better for the elites who make laws. Well, no thank you! I didn't work a lifetime for my neighbors or failing social programs. The Death Tax is a Communist dream making hard working taxpayers slaves to the political elites. While we're at it, let's repeal the Income Tax. Just heard on Tucker Carlson that a Socialist professor wants a 80% tax on income, but admitted she herself doesn't "pay her fair share", even volunteered.
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    I support any reduction in taxes at any time for any person for any reason. What claim does the government have on anyone's estate? By what authority can that possibly be justified? It is theft. It is an infringement on personal property. It is unjust. "They can afford it" is no basis for just governance. You don't get to determine what someone else can or cannot afford to have taken from them. That's tyranny.
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    The death tax - is costing the government more money to enforce than it generates. It costs us citizens money to hire estate lawyers. This is an unnecessary expense - if avoided these funds would be put to more productive use in the economy.
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    People are already going through enough when they lose a loved one, and the death tax just reaffirms that the government is involved in every matter, no matter how private or emotional.
    Like (26)
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    No because we don't need to reduce U.S. government revenue by giving a tax break to the wealthy.
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    I don't see how true conservative lawmakers can support a bill that will increase the deficit by $270 billion. Do you care about your middle class constituents or just wealthy donors?
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