Lawmakers introduce Estate Tax Reduction Act
Lawmakers have introduced the Estate Tax Reduction Act, legislation that would reduce the estate tax by 20 percent— half of the current top rate of 40 percent.
The bipartisan and bicameral legislation was introduced by Senators Joni Ernst of Iowa, John Boozman and Tom Cotton, both of Arkansas, and Congressmen Jodey Arrington and Henry Cuellar, both of Texas.
Cotton says the legislation would cut the estate tax in half, bringing the rate in line with the current capital gains rate.
Ernst says the bill would help remove unfair burden caused by the estate tax and help family farms safeguard the legacy of their business.
Boozman says the bill would help give farmers and business owners more assurance that their years of hard work and investment can be carried on by their children and grandchildren.
The United States has the fourth highest estate and inheritance tax among developed countries. Much of the value in family-owned businesses are in hard assets and must be sold when the owner passes away, endangering the ability of a family business to survive between generations.
About thirty percent of family-owned businesses survive the transition from first to second-generation ownership, twelve percent survive from second to third-generation ownership, and 13 percent of remain in the family for more than 60 years.