Several members of Congress from both sides of the aisle have introduced H.R. 1259, "The Bipartisan Death Tax Repeal Act." During a press conference late Thursday the Representatives discussed the legislation that would permanently repeal estate taxes.
"I think the main point perhaps is can you imagine working your whole life to build up a nest egg or family business only to see Uncle Sam swoop in and take more than half of it upon your death," said Rep. Kevin Brady, R-Texas. "The death tax is still the number one reason family farms and businesses in America aren't passed down to the next generation. It's the wrong tax, at the wrong time and it hurts the wrong people."
Brady went on to say that the tax destroys jobs, lowering employment by 1.5 million jobs, because small businesses are responsible for 60% to 80% of all net new jobs in the last decade. He says ending the estate tax would give the economy a $119 million boost.
"I think most Americans agree that since we pay taxes all of our lives it just doesn't make sense to be taxed again when we die," Rep. Mike Ross, D-Ark., said. "Simply put I believe the death tax is unfair and punishes those Americans who work hard all their lives just so they can pass down their family business to the next generation."
When asked about the current $5 million exemption, Ross reminded reporters that a lot of family farms in terms of land, tractors and farm implements exceed that exemption, which is set to expire in less than two years.
"A lot of these folks are worth a lot of money on paper," Ross said. "But in terms of the amount of money they actually have in cash in their checkbook, it doesn't come anywhere near what it would take to pay the estate tax when they die, therefore they are forced to sell either small business or family farms."
Brady says there is strong support for the repeal in the House although he sees a bit of a fight in the Senate. He says one of the challenges is that with the current exemption and rate extension some Senators may not feel an urgency to act.
"I can tell from having almost let the clock run out last Christmas-time that there were real problems created by the lateness of Congress to act on this issue," Brady said. "So we are going to encourage both the House and Senate to move as quickly as possible on this to create that certainty for farmers and businesses."
The American Farm Bureau Federation has voiced its support of the legislation. President Bob Stallman says estate taxes continue to be a problem for farm and ranch families whose family-owned businesses generate the vast majority of the food for the country. He says the on-again-off-again nature of estate tax law makes it difficult, if not impossible, for farmers and ranchers to engage in planning for the transfer of a family business from one generation to the next.