Death Tax Repeal Act of 2025: What You Need to Know
Efforts are underway to permanently repeal the federal estate tax, often referred to as the “death tax.” The proposed Death Tax Repeal Act of 2025, introduced in both chambers of Congress this February, aims to eliminate estate and generation-skipping transfer (GST) taxes while preserving the gift tax exemption and the step-up in basis for inherited assets.
Although the estate tax affects only a small number of estates — roughly 0.1–0.2% annually — its symbolic weight in debates over wealth and fairness remains significant. In 2025, the tax applies to estates exceeding $13.99 million for individuals or $27.98 million for couples, with a top rate of 40%. Still, the tax brought in just $24 billion last year — about 0.1% of GDP.
Supporters of repeal argue the tax burdens family farms and small businesses lacking liquidity. Critics say repeal would primarily benefit the ultra-wealthy and deepen wealth inequality. Historical arguments echo: those in favor see it as a tool to curb dynastic wealth; opponents view it as double taxation.
Senator John Thune (R-SD) and Representative Randy Feenstra (R-IA) are leading the repeal bills, backed by many Republicans and industry groups. However, passing the legislation may prove difficult. Without enough Senate support, Republicans could try to fold the repeal into a broader economic package or use budget reconciliation, which would limit repeal to 10 years unless renewed.
As estate tax rules may shift after 2025 when current high exemptions expire, proactive planning is key. Families may want to explore gifting strategies, trusts, and other asset protection tools. Give our office a call at 605-275-5665 if you have questions.
