Estate Tax Repeal
July 2003
Background:
Small family owned businesses are often lost by heirs and beneficiaries upon the death of the owner, as forced sales of these businesses and farms may be necessary to meet the immediate estate tax liability.
- Additionally, the “death” tax produces a disincentive to expand a business, create jobs, and invest in capital equipment and is a major reason why 70% of family-run businesses do not survive into the second generation.
- Further, the estate tax is a form of double taxation since profits and earnings have already been taxed once when income taxes were paid.
- Finally, the cost of planning around this legislation and administering these estates by both families and the IRS negates the revenues received from the tax.
Position:
NAWBO supports the permanent repeal of the Estate Tax.
Current Legislation:
Death Tax Repeal Permanency Act of 2003 (H.R.8) Makes the repeal of the estate tax permanent. Sponsored by Congresswoman Jennifer Dunn; introduced 6/12/2003; cosponsors: 209.
- Details: Declares that the sunset provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to Title V: Estate, Gift, and Generation-skipping Transfer Tax Provisions of such Act, so that this tax will not reappear in 2011.
- Status: On 6/18/2003 the bill passed the House. It was received in the Senate on 6/19/03 and read the first time. On 6/20/03 it was read the second time and placed on the Senate Legislative Calendar, where it can be placed on the Senate floor for a vote at any time.
- Action required: Go to www.senate.gov and click on your state to access the web sites and contact facilities of your Senators. Use the sample letter attached to ask them to support with their vote the Death Tax Repeal Permanency Act of 2003 (H.R. 8).
More information on this bill can be found at http://thomas.loc.gov. Key in the bill number, and then click on the various options available.
Please contact Sallie Mullins Thompson at if you have further questions.
Sample letter:
Date
The Honorable (your senator’s full name)
Office address
Washington, DC 20510
Dear Senator (last name)
As the (your title) of (business name) in (city, state), and as a member of National Association of Women Business Owners (NAWBO), I am writing to ask for your support of H.R. 8, the Death Tax Repeal Permanency Act of 2003.
Small family owned businesses are often lost by heirs and beneficiaries upon the death of the owner, as forced sales of these businesses and farms may be necessary to meet the immediate estate tax liability. Additionally, the “death” tax produces a disincentive to expand a business, create jobs, and invest in capital equipment and is a major reason why 70% of family-run businesses do not survive into the second generation. Further, the estate tax is a form of double taxation since profits and earnings have already been taxed once when income taxes were paid. Finally, the cost of planning around this legislation and administering these estates by both families and the IRS negates the revenues received from the tax.
The estate tax diverts resources that would otherwise be available for investment and employment. The tax is philosophically unjust – shouldn’t a person who has spent a lifetime working hard to create wealth be able to pass it onto heirs and beneficiaries, tax free, in whatever way he or she desires? Since small business and entrepreneurial movement historically has led our country out of recession, at this point in time we should be doing everything possible to foster the development of this activity. By imposing an unfair transfer tax on a person’s holdings at the time of death of up to 55%, the estate tax does exactly the opposite of what is needed.
I hope that I can count on your support for this sensible legislation that will significantly help small businesses, the foundation of the economic growth of the U.S. Thank you for your time and consideration of this important manner.
Sincerely,
Your Signature
(Your name)
(Title)
(Contact information)
