Sen. Jeff Flake cosponsored the Death Tax Repeal Act of 2013 on Wednesday.
The bill, which was introduced by Sen. John Thune, permanently eliminates the death tax by repealing both the federal estate tax and the generation-skipping transfer tax.
The bill also makes a permanent maximum gift tax rate of 35 percent and a $5 million lifetime gift tax exemption, while ensuring that no capital gains tax will be paid on the appreciation of assets during one's lifetime.
Flake says this is especially important to family farms and businesses.
The death tax only contributes less than one percent to overall federal tax revenue. Permanently eliminating the death tax would bring families and businesses greater financial certainty, while also growing the U.S. economy, according to Flake.
Economist Douglas Holtz-Eakin estimates that elimination of the tax would reduce the unemployment rate by nearly one percentage point.
In addition, a study from the American Family Business Foundation estimated that the full repeal of the death tax would generate $89 billion in increased economic revenue.
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