Companion bills have been introduced in the U.S. House of Representatives and in the Senate to repeal the federal estate tax. On January 24, 2017, Representative Noem introduced H.R. 631 which was referred to the House’s Ways and Means Committee for consideration. The same day, Senator Thune introduced comparable legislation in the Senate. If enacted by Congress and signed by President Trump, no federal estate tax would be assessed against estates of decedents dying thereafter.
Repeal of the estate tax has been a stated goal of Congressional Republicans for some time. Given the relatively few estates which are now subject to the tax, however, this seems like a change without much consequence. Prior to the 2001 enactment of the Economic Growth and Tax Relief Reconciliation Act, the applicable exclusion amount (the dollar threshold at which an estate became liable for the federal estate tax) was $675,000.00. Today, however, the applicable exclusion amount is $5.49M dollars for individual decedents; for married couples, the exclusion amount is double that. The result of the dramatic increase in the applicable exclusion rate is that now, by most estimates, only two-tenths of one percent of all estates pay any federal estate tax.