Congressional Republicans and their allies are optimistic about finally ending the estate tax, paid by the inheritors of valuable property. Or "death tax" depending on your preferred term.
Rep. Kevin Brady, vying to become chairman of the powerful House Ways and Means Committee in early 2015, is pushing legislation to permanently repeal the federal estate tax. The Texas Republican and other critics contend it's fundamentally unfair to tax those inheriting property, because it has already been subject to taxation. In many cases, inheritors are forced to sell families homes, businesses and other assets just to avoid the huge tax bill.
And they argue the estate tax is the smallest source of revenue of any major tax in the United States.
In 2011, it raised roughly 0.05 percent of all federal revenue, and, in 2012, projections showed that the estate tax would only raise 0.42 percent of federal tax collections, according to Brady's congressional website. In addition, according to this argument, revenues are kept artificially low as taxpayers make economic decisions to avoid the estate tax, such as by making charitable donations.
Grover Norquist, president of Americans for Tax Reform, is optimistic about chances of repeal.
Congressman Kevin Brady (R-Tex.)'s bill H.R. 2429, "Death Tax Repeal Act of 2013," has 215 co-sponsors, The death tax may die.- Grover Norquist (@GroverNorquist) May 15, 2014
Opponents of repealing the estate tax, including billionaire investor Warren Buffett, say it would be a gift to the rich. For most of the United States, the estate tax is now something only the very wealthy have to plan for, they argue. The federal exemption for an individual this year is now $5.34 million, or $10.68 million for a married couple. And that amount is indexed to inflation, so it will continue to rise.Congressman Brady's estate tax-repeal bill would likely clear the Republican majority House - if leaders there decide to bring it up for a vote in an election year. But it would face a much tougher road in the Democratic-controlled Senate - where it died several times during President George W. Bush's administration. And of course President Barack Obama would have to sign off on such a repeal, which seems unlikely.