FOR IMMEDIATE RELEASE
Contact: James Arnold or Mary Collins Atkinson (202) 224-2353
May 13, 2021 

Cotton, Boozman Introduce Bill to Reduce Estate Tax 

Washington, D.C. — Senators Tom Cotton (R-Arkansas), John Boozman (R-Arkansas), and Joni Ernst (R-Iowa) today introduced the Estate Tax Reduction Act, legislation to reduce the estate tax to 20 percent—half of the current top rate of 40 percent.

This bipartisan, bicameral legislation was also introduced by Representatives Jodey Arrington (R-Texas) and Henry Cuellar (D-Texas) in the House of Representatives.

"Families shouldn't have to sell major portions of their businesses or farms after the death of a parent just to afford the 40 percent estate tax. Breaking apart a family's livelihood is neither fair or good for the economy, especially since families are often forced to sell to large corporations. My legislation would cut that rate in half, bringing the rate in line with the current capital gains rate and making it much easier to preserve a family's legacy and way of life," said Cotton.

“Arkansas’s family farmers and small business owners shouldn’t be punished for passing what they’ve established, grown and maintained onto the next generation. Our bill reduces this burden and gives these entrepreneurs and job creators more assurance that their years of hard work and investment can be carried on by their children and grandchildren instead of being forfeited to the federal government,” said Boozman.

Background:

  • The United States currently has the 4th highest estate and inheritance tax among developed countries, just behind France.
  • Much of the value in family-owned businesses are in hard assets and must be sold when the owner passes away, thus endangering the ability of a family business to survive between generations.
  • Only 30% of family-owned businesses survive the transition from first to second-generation ownership, while only 12% survive from second to third-generation ownership.
  • Just 13% of family businesses remain in the family for more than 60 years.
  • Family-owned businesses employ 60% of the U.S. workforce and create 78% of all new jobs.

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