Donald Trump says he wants to repeal the estate tax but retain stepped-up basis for the first $10 million of gains. The tax plan on his campaign website says nothing about the gift tax, however, and it will be very hard for Trump to repeal the gift tax in the next two years. The problem is that if tax reform happens through the filibuster-proof budget reconciliation process, then it will be subject to the Byrd Rule. That means the reconciliation bill can’t cause a long-term increase in the federal deficit (although, as David Herzig and I explain, the Senate Budget Committee chair might have a few tricks up his sleeve that he can play). Reconciliation can be used to repeal the estate tax temporarily (as it was in 2001), but it will be harder to get rid of the gift tax via reconciliation. Let’s say that the Republicans pass a reconciliation resolution covering 2017 to 2026 and then turn off the estate tax for the entire period, with rates returning to current levels in 2027. Estate tax revenues for 2027 won’t decrease relative to current law (unless high net worth individuals strategically die in 2026 rather than 2027). But if Republicans temporarily repeal the gift tax for any year between now and 2026, then estate tax revenues for 2027 and beyond certainly will decline. The Donalds of America will make large transfers to the Ivankas during the gift tax holiday, and so the federal government will raise less in estate tax revenue when the Donalds die. And this means that gift tax repeal — even temporary repeal — will likely flunk the Byrd Rule.

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