WASHINGTON, DC - Ways and Means Committee Ranking Member Sander Levin (D-MI) today introduced legislation to bring fairness to the tax code by restoring the estate tax and gift tax to the more sensible levels that were in effect in 2009.
“Over the past decade, fewer and fewer estates have been required to pay the estate tax, further exacerbating the growing issue of wealth inequality in our nation," said Rep. Levin. “This disturbing trend is yet another stark example of how broken and unfair our tax code is, which is why we have to take action. Requiring more of the wealthiest estates to pay the estate tax and raising the estate tax rate are commonsense steps we can take toward making our tax code fairer."
The estate and gift taxes are part of the federal transfer tax system. The estate tax is imposed on certain transfers at death, while the gift tax is imposed on certain transfers during life. The estate tax was established to help reduce wealth and income inequality in the U.S. - a growing problem - and results in more of the wealthiest Americans paying their fair share of taxes. Fewer than 5,200 estates owed any estate tax in 2015, resulting in 99.85 percent of all estates across the country owing no estate tax. Under current law significant appreciated assets pass tax-free without being subject to any tax on their appreciation, even after transfer and subsequent sale.
Currently, estates valued at or below $5.45 million ($10.9 million for a couple) are exempt from owing any estate tax. H.R. 4996, The Sensible Estate Tax Act of 2016, would return to 2009 levels, lowering the estate tax exemption to $3.5 million ($7 million jointly) and increasing the maximum tax rate to 45 percent. The Administration has included a proposal to set the estate and gift tax to 2009 levels in each of its previous budget proposals, which the Joint Committee on Taxation (JCT) estimated last month would save more than $161 billion over 10 years.
Original cosponsors of the bill are Democratic Whip Steny H. Hoyer (D-MD), Ways and Means Committee Democratic Members Charles B. Rangel (D-NY), Richard E. Neal (D-MA), John B. Larson (D-CT), Earl Blumenauer (D-OR), Bill Pascrell, Jr. (D-NJ), and Joe Crowley (D-NY), and Budget Committee Ranking Member Chris Van Hollen (D-MD).
