GOP senators press Treasury to withdraw estate tax proposal

Dozens of Republican senators are asking the Treasury Department to withdraw its proposed rules on the estate tax, arguing that the regulations would hurt family businesses.

{mosads}”We ask that the proposed regulations not be finalized in their current form as they directly contradict long-standing legal precedent, create new uncertainty for taxpayers, and put family-owned businesses at a disadvantage relative to other types of businesses,” the 41 senators said in a letter to Treasury Secretary Jack Lew on Thursday.

Sen. John Thune (R-S.D.) and Senate Finance Committee Chairman Orrin Hatch (R-Utah) took the lead on the letter.

Other signers include Sens. Marco Rubio (R-Fla.), Jerry Moran (R-Kan.) and Jeff Flake (R-Ariz.), who announced Thursday that they have introduced legislation to prevent the administration from implementing the regulations.

The proposed rules, released in August, would reduce or eliminate certain discounts on the value of shares of family farms and businesses for purposes of the estate tax.

Administration officials have said that the rules are designed to close a “loophole” wealthy taxpayers use to artificially reduce the value of the assets being transferred. But the senators said in the letter that the rules would “discourage families from continuing to operate and build their businesses.”

Any regulations that Treasury issues on the estate tax in the future should “more directly target perceived abuses in the valuation of transferred interests in family businesses,” the senators said. 

Rubio said in a news release that Obama administration’s proposal “is wrongheaded and will kill jobs.”

The bill he introduced with Moran and Flake is identical to legislation introduced last week in the House by Rep. Warren Davidson (R-Ohio).

Business groups have also expressed opposition to the proposed rules and support for the bill.

– updated at 3:21 p.m.