This article is more than 2 years old

This article is more than 2 years old

A Republican senator who said attempts to scale back or eliminate the estate tax recognized “people that are investing as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies” has attempted to clarify his meaning.

McConnell: tax cuts will be popular when people see they are paying less Read more

Chuck Grassley of Iowa, a seven-term senator and senior member of the Senate finance committee, made the remark late last week in an interview with the Des Moines Register.

His words have attracted attention since the passage of the Senate tax bill early on Saturday morning.

Democrats charge that the Republican tax reform is heavily weighted in favor of the rich and corporate America and will add as much as $2tn to the national debt. Republicans respond that the wide-ranging cuts will stimulate economic growth.

Under current law, when someone dies their estate owes taxes on the value of assets transferred to heirs above $5.5m for individuals and $11m for couples.

Only the estates of about two out of every 1,000 Americans who die qualify for such tax.

The Senate bill doubles those limits but does not repeal the tax. The House tax bill initially doubles the limits and then repeals the entire tax after 2023.

House and Senate negotiators are working out the differences between the two bills, with the goal of completing legislation to send to Donald Trump before Christmas.

On Monday, Grassley said his comments had been misinterpreted.

“My point regarding the estate tax, which has been taken out of context, is that the government shouldn’t seize the fruits of someone’s lifetime of labor after they die,” he said in a statement.

“The question is one of basic fairness, and working to create a tax code that doesn’t penalize frugality, saving and investment.”

Farm-state lawmakers and other Republicans have long argued that the estate tax is harsh on small businesses and family farms.

Grassley said he wanted to ensure the tax code was as fair for “family farmers who have to break up their operations to pay the [Internal Revenue Service] following the death of a loved one as it is for parents saving for their children’s college education or working families investing and saving for their retirement”.



The Tax Policy Center has estimated that only 80 small business and small farm estates nationwide will face any estate tax in 2017.