Responsible Estate Tax Act

The Responsible Estate Tax Act (H.R. 2907) proposes to increase federal taxes on the transfer of large fortunes by lowering the threshold at which the estate tax applies and raising the tax rates for the wealthiest individuals. Under this bill, the amount of an estate exempt from taxation would decrease from the current levels to $3.5 million, with new tax rates ranging from 45% to 55%, plus a 10% surtax on estates valued at over $500 million.

For most citizens, this bill would have no direct financial impact, as it specifically targets high-net-worth individuals and large inheritances. However, the legislation includes provisions intended to help family-owned farms and conservation efforts by increasing the valuation discounts for farmland and raising the tax exclusion for land protected by conservation easements. Additionally, the bill closes several common tax planning loopholes, such as certain types of trusts and valuation discounts, to ensure that more assets are subject to federal transfer taxes.