Estate Tax Rate Reduction Act

II 117TH CONGRESS 1ST SESSION S. 1627 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 MAY 13, 2021 Mr. COTTON (for himself, Ms. ERNST, and Mr. BOOZMAN) 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Estate Tax Rate Re- 4 duction Act’’. 5 SEC. 2. REDUCTION OF RATE OF TAX ON ESTATES, GIFTS, 6 AND GENERATION-SKIPPING TRANSFERS. 7 (a) IN GENERAL.—Section 2001 of the Internal Rev- 8 enue Code of 1986 is amended— 9 VerDate Sep 11 2014 05:23 May 27, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1627.IS S1627 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1627 IS (1) by striking subsection (c) and inserting the 1 following: 2 ‘‘(c) RATE OF TAX.—For purposes of determining 3 the tentative tax, the rate of tax shall be 20 percent of 4 the amount with respect to which the tentative tax is com- 5 puted.’’; and 6 (2) in subsection (g)(1), by striking ‘‘rates of 7 tax under subsection (c)’’ and inserting ‘‘rate of tax 8 under subsection (c)’’. 9 (b) CONFORMING AMENDMENTS.— 10 (1) Section 2056A(b)(2) of the Internal Rev- 11 enue Code of 1986 is amended— 12 (A) in subparagraph (B)(i), by striking 13 ‘‘highest’’; and 14 (B) in subparagraph (C), by striking 15 ‘‘highest’’. 16 (2) Section 2107(a) of such Code is amended 17 by striking ‘‘the table contained in’’ and inserting 18 ‘‘the rate of tax under’’. 19 (3) Section 2201(a) of such Code is amended 20 by striking ‘‘the rate schedule set forth in section 21 2001(c)’’ and inserting ‘‘the rate of tax under sec- 22 tion 2001(c)’’. 23 (4) Section 2641 of such Code is amended to 24 read as follows: 25 VerDate Sep 11 2014 05:23 May 27, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1627.IS S1627 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1627 IS ‘‘SEC. 2641. APPLICABLE RATE. 1 ‘‘For purposes of this chapter, the term ‘applicable 2 rate’ means, with respect to any generation-skipping 3 transfer, the product of— 4 ‘‘(1) the rate imposed by section 2001 on the 5 estates of decedents dying at the time of the taxable 6 distribution, taxable termination, or direct skip, as 7 the case may be, and 8 ‘‘(2) the inclusion ratio with respect to the 9 transfer.’’. 10 (5) Section 2801(a)(1) of such Code is amended 11 by striking ‘‘the highest rate of tax specified in the 12 table contained in’’ and inserting ‘‘the rate of tax 13 under’’. 14 (6) Section 6601(j)(2)(A)(i) of such Code is 15 amended by striking ‘‘the rate schedule set forth 16 in’’. 17 (c) EFFECTIVE DATE.—The amendments made by 18 this section shall apply to estates of decedents dying, gen- 19 eration-skipping transfers, and gifts made, after Decem- 20 ber 31, 2020. 21 (d) BUDGETARY EFFECTS.— 22 (1) PAYGO SCORECARD.—The budgetary ef- 23 fects of this section shall not be entered on either 24 PAYGO scorecard maintained pursuant to section 25 VerDate Sep 11 2014 05:23 May 27, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1627.IS S1627 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1627 IS 4(d) of the Statutory Pay-As-You-Go Act of 2010 (2 1 U.S.C. 933(d)). 2 (2) SENATE PAYGO SCORECARD.—The budg- 3 etary effects of this section shall not be entered on 4 any PAYGO scorecard maintained for purposes of 5 section 4106 of H. Con. Res. 71 (115th Congress), 6 the concurrent resolution on the budget for fiscal 7 year 2018. 8 Æ VerDate Sep 11 2014 05:23 May 27, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S1627.IS S1627 kjohnson on DSK79L0C42PROD with BILLS