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Cotton, Colleagues Introduce Legislation to Fix Excessive Taxation for Gold Star Families

May 9, 2019

Contact Caroline Tabler or James Arnold (202) 224-2353

Washington, D.C. - U.S. Senators Tom Cotton (R- Arkansas), Bill Cassidy, M.D. (R-Louisiana), Doug Jones (D-Alabama), Pat Toomey (R-Pennsylvania), Amy Klobuchar (D-Minnesota), Chuck Grassley (R-Iowa), Ron Wyden (D-Oregon), Mark Warner (D-Virginia), Angus King (I-Maine), and 20 other senators introduced legislation providing tax relief for children receiving benefits who have lost a parent serving in the military.

Simplification of a special tax dating back to 1986 that was intended to stop wealthy parents from sheltering income at lower tax rates by shifting it to their children inadvertently caused higher taxes on military survivor benefits. This bipartisan legislation effectively removes these benefits from the special 1986 tax, resolving the unintended tax treatment of survivor benefits.

U.S. Senators Tammy Baldwin (D-Wisconsin), Michael Bennet (D-Colorado), Richard Blumenthal (D-Connecticut), Sherrod Brown (D-Ohio), Richard Burr (R-North Carolina), Bob Casey (D-Pennsylvania), Catherine Cortez Masto (D-Nevada), Mike Crapo (R-Idaho), John Cornyn (R-Texas), Ron Johnson (R-Wisconsin), Steve Daines (R-Montana), Maggie Hassan (D-New Hampshire), Johnny Isakson (R-Georgia), Bob Menendez (D-New Jersey), Patty Murray (D-Washington), Gary Peters (D-Michigan), Pat Roberts (R-Kansas), Tim Scott (R-South Carolina), Kyrsten Sinema (D-Arizona), and Jon Tester (D-Montana) are also cosponsors of the legislation.

"The United States owes a debt to Gold Star families whose loved ones fell defending our flag. While their benefits will never make up for their loss, these families deserve all that our nation promised them. Our bipartisan legislation will provide a technical fix to an outrageous-even if unintended-consequence of tax reform so that Gold Star families receive what they are owed," said Cotton.

"This bipartisan legislation helps those who lost a husband or wife, a father or mother, serving in the military to protect us. This legislation fixes an unintended problem and lessens the taxes of the surviving spouse," said Dr. Cassidy. "The Tax Cut and Jobs act has helped millions. I thank Democratic colleagues for joining to improve the law and ensure more Americans benefit."

"Gold Star families have given more to our country than most of us could ever imagine. While we can never repay their immense sacrifices, we do make a solemn commitment to care for them," said Jones. "Unfortunately, thousands of these widows and widowers are currently denied the full benefits they're due, which forces many to resort to putting some of these benefits in their children's names. To significantly raise taxes on those children's benefits is unconscionable, and I am proud to join with my colleague Senator Cassidy to propose legislation to correct this egregious mistake. It is a first step toward honoring our commitment and making these families whole financially."

"Gold Star families have all endured a terrible tragedy - the loss of a loved one in service to our nation - and deserve the gratitude of all Americans," said Toomey. "The Department of Defense has long provided for the economic wellbeing of children who have lost a parent in military service through survivor benefits. Unfortunately, these benefits are currently being subjected to a higher tax rate than intended. Our bipartisan measure will correct this problem. I appreciate the work of Gold Star families who have led the fight to have Congress address this issue."

"Gold Star families have made the ultimate sacrifice for our country -- they shouldn't have to sacrifice more," said Klobuchar. "Our legislation will reverse the devastating mistake in the 2017 tax law that resulted in a much higher tax rate on Gold Star Families' survivor benefits. The families of our fallen heroes deserve our gratitude, not a bill."

"Historically, after major tax legislation, the long-standing practice has been to correct drafting errors and other technical issues on a bipartisan basis. I appreciate my Democratic colleagues who are working with Republicans to correct this problem. The families of military heroes who gave their lives serving their country shouldn't be penalized by an unintended effect of tax reform." said Grassley.

"Gold Star families deserve our sympathy and gratitude, not an unfair tax increase thanks to a Congressional screw-up," said Warner. "This bipartisan legislation fixes the mistake in the 2017 GOP tax legislation, ensuring surviving families aren't unfairly penalized and paying back those families who have already been hit with this tax hike."

"Wisconsin's Gold Star families have sacrificed so much for this nation and the freedoms we all cherish," said Baldwin. "This bipartisan legislation is a much-needed fix to the 2017 law that unfairly raised taxes on these hardworking families."

"Gold Star families have sacrificed deeply for our country - we owe them our support and gratitude, not an unexpected tax bill," said Bennet. "This bipartisan bill is a common-sense fix that will make sure surviving family members aren't left with an unfair and unnecessary tax burden."

"The courage and resilience of Gold Star families are remarkable beyond words. These heroes deserve our nation's respect and gratitude-not a tax hike on the benefits they have earned because of their sacrifice and tragic loss. I'm proud to support this bipartisan bill that will undo the harm done to Gold Star families by a provision in the Republican tax bill," said Blumenthal.

"Gold Star families have sacrificed so much for this country and nothing should get in the way of providing them with the support they need," said Brown. "The last thing they need is a new tax hike from the same law that slashed tax bills for corporations."

"Americans who have lost a parent or a spouse in military service to our country have made the ultimate sacrifice and they don't deserve an additional burden of a tax increase," said Casey. "We have an obligation to support Gold Star families and I urge my colleagues to swiftly pass this bipartisan bill to lower taxes on survivors benefits for the children and spouses of fallen servicemembers."

"Gold Star families have made an extraordinary sacrifice in supporting their loved ones' service in the military and should not have to face additional hardships after their loss," said Crapo. "This legislation ensures Gold Star families do not face unintended and unfair tax penalties on their survivor benefits. We owe nothing less to the families of our nation's fallen servicemembers."

"Texas' Gold Star families deserve our gratitude and appreciation after experiencing tremendous loss," said Cornyn. "Congress must right this wrong and clarify the law so children who have lost a parent serving in the military receive the survivor benefits they deserve."

"The kids, spouses and family members of our service members deserve every support for the bravery and sacrifice of their loved one," said Cortez Masto. "I'm proud to join this legislation that fixes an error in the recent tax legislation and restores tax relief to Gold Star Families in Nevada, and throughout America. I'll continue to do everything I can in the United States Senate to honor the service of our brave men and women in uniform and support their families."

"Families of those who have lost a loved one while serving in the military should not be forced to pay burdensome taxes," said Daines. "This bipartisan bill would protect family members of brave men and women from unnecessary taxes, and I'm glad so many of my colleagues on both sides of the aisle are supporting this commonsense cause."​

"Our bipartisan legislation would reverse a mistake in the Republican tax law that raised taxes on families of fallen servicemembers who made the ultimate sacrifice in defense of our freedoms," said Hassan. "Raising taxes on Gold Star families is outrageous and we must act swiftly to correct this egregious mistake."

"When Congress sought to ensure that the tax code retained existing benefits for children who have lost a parent serving in the military, an unintended consequence resulted in higher taxes on the death-related benefits to military families. We must fix this issue without delay," said Isakson. "The Tax Cuts and Jobs Act has been an overwhelming success for hardworking Americans. As a member of the Senate Finance Committee, which oversees tax policy, as well as the chairman of the Veterans' Affairs Committee, I'm proud to support this legislation to correct an oversight for our Gold Star Families."

"Our Gold Star families don't deserve to be burdened by the high tax rates they're currently facing on survivor benefits," said Roberts. "Their loved ones made the ultimate sacrifice for our country, and this Marine will continue fighting for these Gold Star families."

"Gold Star families gave the ultimate sacrifice for our country. It is our duty to ensure they have the support and financial security they deserve," said Sinema.

"Gold Star families have endured the unimaginable on behalf of our nation. In return for the life of a loved one, our country provides the grieving families of military heroes with some basic financial support. It can't replace a fraction of what they've lost, but it's a small token of appreciation from a thankful nation," said Tester. "Now, thanks to Trump's disastrous tax bill, these Gold Star children and spouses are having these basic benefits slashed-a particularly unacceptable consequence of this giveaway to corporations and the wealthy."