The U.S. House of Representatives voted to permanently extend the death tax at its current 45 percent rate and $3.5 million exemption. This is a significant tax hike since the death tax was supposed to expire on January 1, 2010.

The increase of the death tax is a major blow to the badly weakened economy since the tax is a huge drag on economic activity. It is also a major disappointment for countless family-owned businesses slammed hard by this unfair tax.

Despite passage in the House, the death tax increase is not yet law since the Senate has not acted. Earlier this year it passed a resolution to extend the death tax permanently as well, but at a lower rate and higher exemption level (35 percent and $5 million).

The Senate version would be better for the economy and family-owned businesses, but full repeal would be best. It would put 1.5 million unemployed Americans back to work and lift a heavy burden from families all across the country.

As the debate moves to the Senate, you can continue to find all of the Heritage Foundation’s work on the death tax – including new videos detailing the struggles the death tax imposes on family-owned businesses – at