WASHINGTON — House Republicans are pleased that their tax reform package includes a full repeal of the estate tax, but members acknowledge that the repeal may not survive by the time the package makes it out of the Senate.
“I believe in the House we’re going to see a full repeal but a delay by five years. I believe in the Senate it’s going to come back with perhaps a change from $11 million for a couple to $22 [million],” New York Republican Rep. Chris Collins told The Daily Caller Wednesday. “But I believe it will come back from the Senate with the estate tax back in, but perhaps protecting — I’ve even heard a way to protect farmers — if the farm is left to a direct family member, etc.”
The 40 percent estate tax, commonly known as the death tax, currently applies to inheritances over $5.49 million. That cap will rise to $5.60 million for individuals in 2018.
“In this House, we feel strongly that it is a tax that punishes family-owned businesses and farms, and if we eliminate it, it will create 140,000 new jobs,” House Ways and Means Chairman Kevin Brady told TheDC Wednesday.
Maine Republican Sen. Susan Collins told Bloomberg News on Monday she doesn’t see any need to repeal the estate tax. Sen. Collins voted against repealing it in 2015.
“I do not believe that the top rate should be lowered for individuals who are making more than $1 million a year,” she told Bloomberg. “I don’t think there’s any need to eliminate the estate tax.”
South Dakota Republican Sen. Mike Rounds also declared he was against a full repeal of the death tax telling Bloomberg in early October, “I think the estate tax change should come for those individuals between the $5 million and the $10-$15 million category for individuals, and double that for the spouses.” He added, “Specifically because the vast-majority of the real small businesses are valued in that range.”
“On the Senate side our strongest advocate is Sen. John Thune,” Jim Martin, president of the 60 Plus Foundation told TheDC Wednesday. “Unfortunately, there are a couple of senators who have gone squishy soft on this issue … but they hear the business from Schumer and troops about, ‘Oh, it’s a tax cut for the rich.'”
Utah Republican Sen. Orrin Hatch, Bloomberg notes, are now devising a plan that would keep the estate tax in the tax reform package, while increasing the level of income for which it would apply.
“We have been thinking about that,” said Hatch, the chairman of the tax-writing Senate Finance Committee.
Martin took to task critics of the full repeal of the death tax telling TheDC, “It’s not a tax cut for the rich. This issue for Schumer and Pelosi about giving a break to the rich. That’s baloney. The rich set up trusts and foundations. It’s farmers ranchers and small businesses who are impacted. They should not give in,”, noting that Congressional Black Caucus member Sanford Bishop, a Georgia Democratic congressman, supports full repeal.
In a 2015 statement touting his support for full repeal of the death tax, Bishop said, “I have heard from farmers, funeral home owners, newspaper publishers, radio station owners and garment manufacturers about the need for estate tax relief. I believe that the estate tax is politically misguided, morally unjustified and downright un-American.”
Editor’s note: Collins did not say she would not vote for a tax reform package that repealed the death tax. She said she saw no reason to repeal the death tax. The article has been corrected.