House Passes the Tax Cuts and Jobs Act
Earlier today the House passed the Tax Cuts and Jobs Act, H.R. 1, paving the way for the permanent repeal of the estate tax and enacting several long-awaited, pro-business reforms to our tax code. Full repeal of the estate tax has been the primary goal of FBC since the organization was founded in 2012. Repeal legislation gained 218 cosponsors in both the 112th and 113th Congress and passed the House in 2015. Today, 150 of our partner organizations can celebrate estate tax repeal in comprehensive tax reform, which passed with a vote of 227-205. H.R. 1 doubles the exemption to $11 million per individual and $22 million per couple until 2025. On January 1, 2025, the death tax and generation-skipping tax is repealed and the gift tax rate is dropped to 35% with full step up in basis maintained. See our letter of support to House leaders and our letter of congratulations to Congresswoman Kristi Noem for having her signature legislation included in tax reform. Congresswoman Noem not only provided a cogent voice for death tax repeal but also contributed a compelling personal story that illustrates destructive effects of the tax.
Moving forward, the permanent repeal of the death tax in the H.R. 1 offers Senate Republicans a strong position in negotiations. Unfortunately, while the current Senate mark doubles the exemptions for individuals and families, it stops short of repealing the tax. FBC is working with our members, coalition partners, Senate leadership, and the Senate Finance Committee to achieve the best policy possible on estate tax repeal.
In addition to death tax repeal, H.R. 1 offers small, family businesses with broad tax relief by enacting full business expensing for five years, cutting the business tax rate on pass-through entities from 44.6 percent to 25 percent, and implementing a territorial tax system that makes it easier for businesses operating internationally to compete. FBC is heartened by the successful passage of H.R. 1, and thanks to Speaker Ryan, Chairman Brady, and the Ways and Means Committee for taking the first step in fixing our outdated and burdensome tax code. The successful inclusion of a death tax repeal provision in the House bill demonstrates that the legislative process is working. We look forward to seeing the Senate version, and finally bringing tax relief to middle-class families and job creators across the country.