U.S. Senate Republican Leader Mitch McConnell joined Senator John Thune (R-SD) today in introducing the Death Tax Repeal Act of 2013, which would permanently abolish the federal death tax. In addition, the Thune/McConnell legislation sets a lifetime gift tax exemption of up to $5 million, and makes permanent a 35 percent gift tax rate for gifts made over that amount (indexed to inflation).
During a press conference on Capitol Hill today, Senator McConnell said the death tax is the federal government’s final insult to American taxpayers and it needs to be repealed.
“The death tax unduly burdens American families by taxing assets that are handed down from generation to generation, like family farms or small family businesses,” Senator McConnell said. “It is the federal government’s final insult to tax the transfer of your accumulated assets when you have already paid taxes on such assets throughout your life. The thought of having to visit the IRS and the undertaker on the same day is an absolute outrage. This is wrong and it’s why I have consistently supported legislation to eliminate this burdensome tax.”
Between 2009 and 2011, Kentuckians paid more than $225 million in death taxes. Senator McConnell has heard stories from many constituents regarding the impact the death tax is having on them and their families. In fact, one Kentuckian said it would destroy his family farming operation. And another said she worked hard over the years to invest in property — land she owns and inherited — but when she dies, her children would be forced to sell it just to pay the death tax.
Last year, during the fiscal cliff debate, Senator McConnell negotiated with the Vice President to establish a permanent reduction in the death tax to provide Americans the ability to pass their life’s work down to the next generation. Without this change, family farms and small businesses valued at $1 million or more would have been taxed at 55 percent starting in 2013.
“We have made some progress exempting many of Kentucky’s family farms and small businesses from the death tax,” Senator McConnell said. “And I’m proud to join Senator Thune in introducing this repeal bill that will finish the job by abolishing, once and for all, this unfair, anti-American tax.”