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[Return]Economic and Tax Policy
Estate and Gift Tax


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Estate & Gift Tax (Death Tax)
 
Status:

The Death Tax Elimination Act (H.R. 8), sponsored by Reps. Jennifer Dunn (R-WA) and John Tanner (D-TN), was approved by the U.S. House of Representatives in June 2000. The U.S. Senate followed suit by passing the measure July 14, 2000. The President has vetoed it, but the U.S. House is scheduled to vote the week of September 4 to override his veto.

The U.S. Chamber is also watching related bills, including:

  • Estate and Gift Tax Rate Reduction Act of 1999 (S. 38)
  • Family Heritage Preservation Act (H.R. 86/S. 56)
  • Estate Tax Elimination Act of 1999 (S. 1128)
U.S. Chamber Says:
 
Repeal of the estate and gift tax is a top priority. The current estate and gift tax system can deplete the estates of those who have saved their entire lives, force family businesses to liquidate and lay off workers, and motivate people to make financial decisions for estate tax purposes rather than for business or investment reasons.
 
Family-owned businesses should not be punished for being successful or for having their owners pass away. Fundamentally, the United States is the land of opportunity, encouraging free enterprise and rewarding entrepreneurs. The estate and gift tax runs contrary to this basic philosophy.
 
Recent U.S. Chamber News/Action:
 
 
 
 
Background:
 
The Taxpayer Relief Act of 1997 is gradually increasing the "exemption amount" of an estate and will reach $1 million in 2006. In addition, a separate deduction for "qualified family-owned business interests" (QFOBI) is now allowed. In combination, the exemption amount and the QFOBI can effectively remove up to $1.3 million from estate taxation.
 
The estate gift and generation-skipping transfer tax is very complicated and planning can be very difficult and expensive - all for a tax that currently generates little more than one percent of the total federal budget. Nonetheless, the maximum marginal tax rate on estates can still effectively be a stifling 60 percent.
 
 
 
Updated by the U.S. Chamber Economic Policy Division, September 2000.

 


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