Estate Tax Rate Reduction Act

I 116TH CONGRESS 2D SESSION H. R. 5652 To amend the Internal Revenue Code of 1986 to reduce the rate of tax on estates, gifts, and generation-skipping transfers. IN THE HOUSE OF REPRESENTATIVES JANUARY 17, 2020 Mr. ARRINGTON introduced the following bill; which was referred to the Com- mittee on Ways and Means, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdic- tion of the committee concerned 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 VerDate Sep 11 2014 23:53 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5652.IH H5652 2 •HR 5652 IH SEC. 2. REDUCTION OF RATE OF TAX ON ESTATES, GIFTS, 1 AND GENERATION-SKIPPING TRANSFERS. 2 (a) IN GENERAL.—Section 2001 of the Internal Rev- 3 enue Code of 1986 is amended— 4 (1) by striking subsection (c) and inserting the 5 following: 6 ‘‘(c) RATE OF TAX.—For purposes of determining 7 the tentative tax, the rate of tax shall be 20 percent of 8 the amount with respect to which the tentative tax is com- 9 puted.’’; and 10 (2) in subsection (g)(1), by striking ‘‘rates of 11 tax under subsection (c)’’ and inserting ‘‘rate of tax 12 under subsection (c)’’. 13 (b) CONFORMING AMENDMENTS.— 14 (1) Section 2056A(b)(2) of the Internal Rev- 15 enue Code of 1986 is amended— 16 (A) in subparagraph (B)(i), by striking 17 ‘‘highest’’; and 18 (B) in subparagraph (C), by striking 19 ‘‘highest’’. 20 (2) Section 2107(a) of such Code is amended 21 by striking ‘‘the table contained in’’ and inserting 22 ‘‘the rate of tax under’’. 23 (3) Section 2201(a) of such Code is amended 24 by striking ‘‘the rate schedule set forth in section 25 VerDate Sep 11 2014 23:53 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5652.IH H5652 3 •HR 5652 IH 2001(c)’’ and inserting ‘‘the rate of tax under sec- 1 tion 2001(c)’’. 2 (4) Section 2641 of such Code is amended to 3 read as follows: 4 ‘‘SEC. 2641. APPLICABLE RATE. 5 ‘‘For purposes of this chapter, the term ‘applicable 6 rate’ means, with respect to any generation-skipping 7 transfer, the product of— 8 ‘‘(1) the rate imposed by section 2001 on the 9 estates of decedents dying at the time of the taxable 10 distribution, taxable termination, or direct skip, as 11 the case may be, and 12 ‘‘(2) the inclusion ratio with respect to the 13 transfer.’’. 14 (5) Section 2801(a)(1) of such Code is amended 15 by striking ‘‘the highest rate of tax specified in the 16 table contained in’’ and inserting ‘‘the rate of tax 17 under’’. 18 (6) Section 6601(j)(2)(A)(i) of such Code is 19 amended by striking ‘‘the rate schedule set forth 20 in’’. 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to estates of decedents dying, gen- 23 eration-skipping transfers, and gifts made, after Decem- 24 ber 31, 2019. 25 VerDate Sep 11 2014 23:53 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5652.IH H5652 4 •HR 5652 IH (d) BUDGETARY EFFECTS.— 1 (1) PAYGO SCORECARD.—The budgetary ef- 2 fects of this section shall not be entered on either 3 PAYGO scorecard maintained pursuant to section 4 4(d) of the Statutory Pay-As-You-Go Act of 2010 (2 5 U.S.C. 933(d)). 6 (2) SENATE PAYGO SCORECARD.—The budg- 7 etary effects of this section shall not be entered on 8 any PAYGO scorecard maintained for purposes of 9 section 4106 of H. Con. Res. 71 (115th Congress), 10 the concurrent resolution on the budget for fiscal 11 year 2018. 12 Æ VerDate Sep 11 2014 23:53 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H5652.IH H5652