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Home > News

Rep. McDermott Introduces Sensible Estate Tax Act

April 22, 2009

Rep. Jim McDermott, a senior Member of the House Ways and Means Committee, today introduced the Sensible Estate Tax Act that would finally and fairly reform existing tax law that swings wildly between collecting no revenue to collecting billions from year to year, threatens tens of billions in existing revenue to the Treasury and affects only a fraction of one percent of the very wealthiest Americans.
 
“Those Americans who have reaped huge fortunes as a result of their enterprise in America’s free-enterprise system owe their country something in return,” said Rep. Jim McDermott. “This legislation provides for a modest and reasonable return on the investment America made in these people through the system we all work hard to support and advance.”

In summary, HR 2023, the Sensible Estate Tax Act would:

• Permanently exclude the first $2 million ($4 million for a couple) in the value of an estate from being subject to any tax;
• Reform the estate tax to ensure that surviving spouses are entitled to the full $2 million exclusion to which their dead spouse was entitled;
• Unify the estate tax and gift tax rules for simplicity; and,
• Establish progressive tax rates on estates subject to the tax

The existing law fluctuates wildly from year to year, from imposing no tax on estates to imposing billions of dollars of taxes on estates and Rep. McDermott said it is time to institute reasonable and predictable reforms.  “The sky is the limit when it comes to pursuing the American Dream but the sky is not the limit when it comes to taxing the American people; we need an estate tax that is predicable and fair and that’s what this legislation is.”

Under McDermott’s legislation, fewer than 700 small businesses and farm estates across the entire nation would be affected and substantially less than one percent of family estates would be affected.

A copy of the legislation is attached along with a report from the independent Center for Budget and Policy Priorities and an independent analysis by the Joint Committee on Taxation.

Read the Bill
Center on Budget and Policy Priorities Report
Joint Committee on Tax Score