On April 15, taxpayers across the country were once again reminded just how convoluted and outdated our tax system is. Congress must act to simplify the federal tax code and protect Americans from excessive rates and unfair collection practices.
An example of our flawed Internal Revenue Code is the federal estate tax, or more commonly referred to as the “death tax.” By imposing up to a 40 percent tax on the transfer of a deceased individual’s assets, the death tax often forces surviving relatives to sell their family business, farm land, or other assets to comply with the federal government.
While portrayed by some as a profitable tax on the wealthiest Americans, studies have shown the tax is a declining source of revenue that hits minority, women, and family-owned businesses and farms the hardest. Wisconsin is one of 30 states that eliminated its state estate tax in recognition of its failures, but Wisconsinites still must comply with federal death tax statutes.
The federal estate tax is duplicative, forcing families to pay additional taxes on assets that have already been taxed for years, and ineffective, providing only 0.6 percent of the federal government's total revenue each year.
According to the Tax Foundation, repealing the death tax would create 139,000 jobs and gradually increase the U.S. capital stock by 2.2 percent. The United States has the fourth highest estate tax in the world, which hinders economic growth and international competition.
This week, H.R. 1105, the Death Tax Repeal Act of 2015, passed the House of Representatives by a vote of 240-179. I urge my colleagues in the Senate to pass it expeditiously and send it to the President’s desk. We should eliminate this stifling and misguided tax and provide security for the family businesses and farms that fuel our economy.
It’s time to repeal the death tax.