Title: Estate Tax Rate Reduction Act
Policy area: Taxation

Summary:
Estate Tax Rate Reduction Act
This bill reduces the rate for the tax on estates, gifts, and generation-skipping transfers to 20%. (Under current law, the highest rate is 40%.)
The bill also exempts the budgetary effects of the tax reduction from the Pay-As-You-Go (PAYGO) rules established by the Statutory Pay-As-You-Go Act of 2010 and the FY2018 congressional budget resolution.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 176 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                 S. 176

To amend the Internal Revenue Code of 1986 to reduce the rate of tax on 
           estates, gifts, and generation-skipping transfers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 17, 2019

    Mr. Cotton (for himself, Mr. Boozman, Mr. Blunt, and Ms. Ernst) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to reduce the rate of tax on 
           estates, gifts, and generation-skipping transfers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Estate Tax Rate Reduction Act''.

SEC. 2. REDUCTION OF RATE OF TAX ON ESTATES, GIFTS, AND GENERATION-
              SKIPPING TRANSFERS.

    (a) In General.--Section 2001 of the Internal Revenue Code of 1986 
is amended--
            (1) by striking subsection (c) and inserting the following:
    ``(c) Rate of Tax.--For purposes of determining the tentative tax, 
the rate of tax shall be 20 percent of the amount with respect to which 
the tentative tax is computed.''; and
            (2) in subsection (g)(1), by striking ``rates of tax under 
        subsection (c)'' and inserting ``rate of tax under subsection 
        (c)''.
    (b) Conforming Amendments.--
            (1) Section 2056A(b)(2) of the Internal Revenue Code of 
        1986 is amended--
                    (A) in subparagraph (B)(i), by striking 
                ``highest''; and
                    (B) in subparagraph (C), by striking ``highest''.
            (2) Section 2107(a) of such Code is amended by striking 
        ``the table contained in'' and inserting ``the rate of tax 
        under''.
            (3) Section 2201(a) of such Code is amended by striking 
        ``the rate schedule set forth in section 2001(c)'' and 
        inserting ``the rate of tax under section 2001(c)''.
            (4) Section 2641 of such Code is amended to read as 
        follows:

``SEC. 2641. APPLICABLE RATE.

    ``For purposes of this chapter, the term `applicable rate' means, 
with respect to any generation-skipping transfer, the product of--
            ``(1) the rate imposed by section 2001 on the estates of 
        decedents dying at the time of the taxable distribution, 
        taxable termination, or direct skip, as the case may be, and
            ``(2) the inclusion ratio with respect to the transfer.''.
            (5) Section 2801(a)(1) of such Code is amended by striking 
        ``the highest rate of tax specified in the table contained in'' 
        and inserting ``the rate of tax under''.
            (6) Section 6601(j)(2)(A)(i) of such Code is amended by 
        striking ``the rate schedule set forth in''.
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying, generation-skipping transfers, and 
gifts made, after December 31, 2019.
    (d) Budgetary Effects.--
            (1) PAYGO scorecard.--The budgetary effects of this section 
        shall not be entered on either PAYGO scorecard maintained 
        pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 
        2010 (2 U.S.C. 933(d)).
            (2) Senate paygo scorecard.--The budgetary effects of this 
        section shall not be entered on any PAYGO scorecard maintained 
        for purposes of section 4106 of H. Con. Res. 71 (115th 
        Congress), the concurrent resolution on the budget for fiscal 
        year 2018.
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