Tax Issues

Estate Tax and Tax Reform

CDA Supported H.R. 1, the Tax Cuts and Jobs Act, passed by Congress and signed by the President in December 2018.

  • In 2001, Congress enacted legislation (PL 107-16) that made significant changes in the federal estate tax – or “death” tax – over the 2001 to 2009 period by gradually increasing the size of estates exempt from the tax and gradually reducing the tax rate applied.
  • Since that time, CDA has been supportive of various efforts in Congress aimed at making the repeal of the estate tax permanent. We believe that permanent repeal of the estate tax will ensure the vitality of America’s small businesses – the backbone of our nation’s economy.
  • The law reduces the corporate rate from 35 to 21% for tax years beginning after December 31, 2017.
  • The bill reduces taxes on pass through entities, seen as key drivers in job creation. The law provides for a 20% tax deduction on the first $315,000 of joint income earned by all businesses organized as S corporations, partnerships, LLCs and sole proprietorships. The bill reduces their effective marginal tax rate to no more than 29.6%.
  • It allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers - unleashing growth of jobs, productivity and paychecks.
  • The bill provides immediate relief from the Death Tax by doubling the amount of the current exemption (from $5.49 million per person to $10 million per person) to reduce uncertainty and costs for many family-owned businesses when they pass down their life's work to the next generation. The provision is in effect for tax years 2018-2025.