Death Tax Repeal Bills Introduced in Congress: A Legislative Showdown Looms

Introduction

New legislation to repeal the federal estate tax, often referred to as the “death tax,” has been introduced in Congress. Senator John Thune (R-SD) and Representative Randy Feenstra (R-IA) have introduced companion bills in the 119th Congress—the Death Tax Repeal Act of 2025—seeking to eliminate the estate and generation-skipping transfer (GST) taxes. This move, while long a Republican priority, faces significant political hurdles, particularly as it does not appear to be a primary focus of President Trump’s tax agenda, which has so far focused more on middle-class relief than benefits for high-net-worth individuals.

What is the “Death Tax”?

The estate tax is a federal tax imposed on the transfer of wealth at death, applying to estates exceeding the exemption threshold, which is set at $13.99 million per individual in 2025. Advocates for repeal argue that the tax imposes a burden on family-owned businesses and discourages investment, while opponents contend that it primarily affects high-net-worth individuals and serves as a mechanism for reducing wealth concentration. The broader debate over the estate tax is closely tied to discussions on economic fairness, revenue generation and tax policy.

What the Bills Say

Both the Senate and House versions of the Death Tax Repeal Act aim to:

1. Fully repeal the federal estate tax—taxation on inherited wealth for estates exceeding the current exemption ($13.99 million per individual in 2025).
2. Terminate the generation-skipping transfer tax, which currently applies to certain wealth transfers designed to bypass an intermediate generation.
3. Modify but retain the gift tax, capping the lifetime exemption at $10 million (indexed for inflation) while keeping existing marginal rates (18%-35%).
4. Provide a transition period for Qualified Domestic Trusts (QDOTs)—granting a 10-year tax-free window for distributions to surviving spouses of noncitizens previously subject to estate taxation.

Key Differences Between the Senate and House Bills

While substantially similar, the two bills differ slightly in structure and legislative approach:

Feature	Senate Bill (Thune’s Version)	House Bill (Feenstra’s Version)
Legislative Strategy	Expected to face stronger resistance in Senate	Likely to pass in GOP-controlled House
Sponsorship	Co-sponsored by high-profile Senate Republicans	Introduced solely by Feenstra, with expected House GOP backing
Gift Tax Language	More detailed treatment of trust taxation	Streamlined but functionally identical provisions
Placement in the GOP Tax Agenda	May be used as a bargaining chip for broader tax negotiations	Positioned as a major House tax priority

 

Forecasting the Bill’s Chances: A Moderate-to-Low Likelihood of Passage

While Republican control of Congress and the White House may increase the likelihood of an estate tax repeal, several factors complicate its path forward:

1. Competing Tax Policy Priorities

Current tax policy discussions have largely centered on proposals aimed at middle-class workers rather than estate tax relief for the ultra-wealthy. Among the key tax measures being considered:

• Eliminating federal taxes on tips
• No federal tax on overtime pay
• Increasing taxes on billionaire professional sports team owners

Given these priorities, passing a massive estate tax repeal, which would most significantly impact high-net-worth individuals, may not align with broader legislative goals.

2. The Senate Is More Moderate Than the House—Even on the GOP Side

While the House is expected to pass the bill with ease, the Senate is a different story:

• Moderate Republicans in swing states (e.g., Susan Collins of Maine and Lisa Murkowski of Alaska) may hesitate to vote for an estate tax repeal, particularly if Trump’s economic message is focused on middle-income workers.
• Concerns about the estimated $20-30 billion per year in lost federal revenue may lead some fiscally conservative lawmakers to reconsider a full repeal, especially if additional tax cuts are also on the table.

3. A Likely Bargaining Chip for Other Tax Policy Moves

Rather than passing estate tax repeal outright, Republicans may use the bill as a negotiating tool in broader tax reform talks.

• The 2017 Tax Cuts and Jobs Act (TCJA) increased the estate tax exemption from $5.49 million to $11.18 million (now $13.61 million due to inflation adjustments). That provision expires in 2025.
• Republicans could use the repeal bill as leverage to push for making the TCJA exemption increase permanent rather than a full repeal of the tax.
• If estate tax repeal becomes a sticking point in Senate negotiations, expect it to be scaled back or restructured rather than fully enacted.

Conclusion: Expect a Wild Year for Estate Planners and Their Clients

Even if outright estate tax repeal doesn’t pass, 2025 is shaping up to be a critical year for estate planning:

• If the TCJA exemption expires, the estate tax exemption drops back to pre-2017 levels, dramatically increasing tax exposure for high-net-worth families.
• Estate planners will need to closely monitor legislative developments, as a permanent TCJA fix or a negotiated estate tax reduction could drastically affect future strategies.
• For now, buckle up—this is going to be a turbulent year in estate tax policy.

While the likelihood of full repeal remains uncertain, the issue will likely play a role in broader tax policy discussions. Whether through repeal, reform, or compromise, the outcome of these bills will have long-term implications for wealth transfer and estate planning strategies in the years ahead.

To discuss further, please contact KJK Estate Planning attorney Gregory Williams (GLW@kjk.com; 614.427.5746).