Last week, I joined with 34 of my Senate colleagues to introduce the Death Tax Repeal Permanency Act (S 2242). This legislation will permanently abolish the federal estate tax, better known by ranchers, farmers, and family business owners across America as the “death tax.”

I believe the death tax is destructive, misguided, and inefficient, and that our economy, small businesses, family farms, and ranches that are expected to be transferred to future generations will benefit enormously from its demise.

America’s family businesses, farmers and ranchers were spared from the wrath of the federal estate tax in 2010, but unfortunately this was merely a short reprieve.

The current rate of 35 percent on estates worth more than $5 million per individual expires at the end of the year and will be raised to 55 percent on estates worth more than $1 million.

Successful entrepreneurs and small business owners across America are once again subject to a punitive tax on their hard work, making planning and passing on farms, ranches, and businesses to the next generation even more difficult.

As it stands today, more than 70 percent of family businesses do not survive to the second generation, and nearly 90 percent of family businesses do not survive to the third generation.

In the current economic climate, where small businesses have borne the brunt of job losses, repealing the death tax once and for all will provide an immediate means to strengthen our economy by allowing small business owners to invest more in their enterprises and less in accountants and lawyers.

This legislation is a companion bill to HR 1259, introduced by Rep. Kevin Brady, and which has more than 200 bipartisan co-sponsors in the House.

Specifically, our bill will repeal the federal estate tax; repeal the generation skipping transfer tax; make permanent the maximum 35 percent gift tax rate and a $5 million lifetime gift tax exemption; and maintain the stepped-up basis provisions important to family farms, ranches and businesses.

At a time when Congress should be focused first and foremost on economic growth and job creation, repealing the death tax would unleash new economic activity.

According to a study by former Congressional Budget Office Director Douglas Holtz-Eakin, repealing the death tax would create 1.5 million additional small business jobs, and it would shave almost a percentage point off the unemployment rate.

The death tax is not only destructive to family businesses, farms, and ranches it is highly inefficient and unnecessary. Consider that estate and gift taxes combined only bring in about one percent of all federal revenue. In 2009, for example, federal estate and gift taxes amounted to $23 billion.

This is less than three days’ worth of federal government spending at our current rate. And according to some studies the cost of compliance with this onerous tax is even higher than the amount it actually collects. In fact, a former member of the Council of Economic Advisors during the Clinton Administration estimated the total compliance burden from the estate tax at $26 billion each year. A death in the family should not be a taxable event. It makes no sense to require grieving families to pay a confiscatory tax on their loved one’s farm, ranch or nest egg that has been built from income already taxed when originally earned.

Often, this tax is paid by selling family assets like farms, ranches and businesses. Other times, employees of the family business must be laid off and payrolls slashed – or businesses liquidated – just to pay the burdensome death tax.

This legislation is supported by the National Cattlemen’s Beef Assoc., the American Farm Bureau Federation, the U.S. Chamber of Commerce, and more than 50 other organizations representing a wide variety of interests. While some in Congress, along with President Obama, believe that a few modifications to the death tax will suffice, many of us believe that the ultimate solution to the heartache and economic distress caused by this destructive tax is its complete repeal. It is time to bury the death tax once and for all.

Sen. Thune is a member of the tax-writing Senate Finance Committee, as well as the Agriculture, Commerce, and Budget Committees.