WASHINGTON, D.C. — Alabama junior Senator Luther Strange (R-Ala.) has co-sponsored a bill with Sen. John Thune (R-SD) to permanently repeal the federal estate tax, which is more commonly known as the death tax. Titled “The Death Tax Repeal Act,” Thune and Strange’s bill would amend the IRS Code of 1986 to eliminate the estate tax and generation-skipping transfer taxes.
According to U.S. law, the estate tax applies to property that is transferred via a will or according to state laws of descent and distribution.
While the death tax places economic hardship on every grieving family, farmers particularly struggle with disproportionate taxation on the value of the inherited land when it passes from one generation to the next.
“For too long, farms across the state have dealt with the undue burden of the death tax, often struggling to keep their land in the family,” Sen. Strange said. “By repealing the tax, we will unleash the full potential of multi-generational family businesses. I am proud to join over thirty of my Senate colleagues as we work to push this commonsense bill across the finish line.”
The estate tax has long been criticized as a wealth transfer mechanism to redistribute funds upon death. In an editorial, Investors Business Daily attacked the tax for retroactively punishing people for their success. “People should not be punished because they work hard, become successful and want to pass on the fruits of their labor, or even their ancestors’ labor, to their children,” the editorial said. “As has been said, families shouldn’t be required to visit the undertaker and the tax collector on the same day.”