WASHINGTON (March 27, 2013) — The U.S. Senate rejected an amendment by Sen. John Thune, R-S.D., to abolish the estate tax as part of the larger budget package drawn up by the Senate's Democratic majority.
The $3.7 trillion budget resolution eked out a 50-49 victory in the very early morning of March 23. Sen. Thune's estate tax amendment died on the Senate floor the night of March 22.
In a statement after the vote on his amendment, Sen. Thune expressed both his disappointment at its failure and his staunch opposition to the estate tax.
"A death in the family should not be a taxable event," Sen. Thune said. "Unfortunately, a majority of Senate Democrats opposed full repeal of this unfair tax on family farms and businesses, and continue to support a tax policy that hurts economic growth and job creation.
"Currently 70 percent of family businesses do not survive to the second generation, and 90 percent of family businesses do not survive to the third generation," he said.
The Tire Industry Association (TIA) was one of many business associations that wrote Sen. Thune supporting the amendment.
TIA Executive Vice President Roy Littlefield quoted a study by Douglas Holtz-Eakin, former director of the Congressional Budget Office, which estimated that estate tax repeal would create some 1.5 million additional small business jobs.
Mr. Littlefield also quoted a 2012 Joint Economic Committee report which found that the estate tax prevented some $1.3 trillion in capital formation.
"It makes no sense to require grieving families to pay a confiscatory tax on their loved one's nest egg," Mr. Littlefield said. "No one should be punished for fulfilling the American dream."
Passage of the American Taxpayer Relief Act last January set the top estate tax rate at 40 percent on estates worth more than $5.25 million. Estate values will be adjusted for inflation in future years.