Today Sen. Dick Lugar (R-IN) joined Republican colleagues in introducing the Death Tax Repeal Permanency Act (S. 2242). Lugar is an original co-sponsor of the bill, which was introduced by Sen. John Thune (R-SD). The legislation would permanently repeal the federal estate tax and the generation skipping transfer tax. It also would make permanent the 35% gift tax rate alongside the $5 million lifetime gift tax exemption, as well as maintain the stepped-up basis provisions critical to many small businesses and family farms.
"Since its modest beginnings in 1916, the estate tax has mushroomed into an exorbitant tax on death that discourages savings, economic growth and job formation by blocking the accumulation of entrepreneurial capital," Lugar said.
"But the estate tax affects more than just the national economy," Lugar continued. "It affects how we as a nation think about community, family and work. Small businesses and farms represent much more than assets. They represent years of toil and entrepreneurial risk taking. They also represent the hopes that families have for their children. Part of the American Dream has always been to build up a business, farm, or ranch so that economic opportunities and a way of life can be passed on to one's children and grandchildren."
Lugar has long argued that estate taxes are counterproductive for the U.S. economy. As Chairman of the Senate Agriculture Committee, he held hearings on the negative impact of death taxes on farmers and ranchers.
According to the last USDA Census of Agriculture, individuals, family partnerships and family corporations own 98 percent of our nation's 2.2 million farms and ranches. When estate taxes on an agricultural business exceed cash and other liquid assets, surviving family partners are often forced to break up their business by selling land, buildings or equipment. Recent increases in agriculture land values have expanded the number of farms and ranches that are subject to death taxes.
The Death Tax Repeal Permanency Acthas the strong endorsement of numerous organizations, including Americans for Tax Reform, the National Taxpayers Union, Citizens Against Government Waste, the National Federation of Independent Business, and the American Farm Bureau Federation.
Lugar also is a co-sponsor and longtime proponent of the FairTax Act, which would abolish the federal income tax and the Internal Revenue Service, along with federal employment taxes, death taxes, corporate taxes, and social security taxes. It would replace all these taxes with a single national sales tax on consumer goods and services. Implementation of the FairTax Act would stimulate job-creating economic growth and encourage investment in the American economy.