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June 20, 2000

Abercrombie Teleconference on Estate Tax Repeal

Congressman Neil Abercrombie hosted a live video teleconference today linking Hawaii small business leaders with Washington D.C. to discuss repeal of the estate tax.

Participants at the Honolulu site included Wendell Koga, Hawaii Farm Bureau; Jim Starshak, Small Business Council of Hawaii and Carlsmith, Ball, Wichman, Murray, Case; Gareth Sakakida, Hawaii Transportation Association; Tim Lyons, Hawaii Roofing Contractors; Randy Hiyoto, Chamber of Commerce of Hawaii; Beverly Harbin, Small Business Economic Revival Force; and Art Heath, American Movers.

Participating from the House of Representatives studios in Washington, DC, were Abercrombie and Representative Jennifer Dunn (R-WA), a prominent member of the tax-writing Ways and Means Committee and a leading advocate of repealing the estate tax.

Abercrombie and Dunn are among the sponsors of H.R. 8, a bill to repeal the estate tax, which passed the House of Representatives earlier this month on an overwhelming two-thirds vote.

"Neil has been wonderful on this issue," Dunn told the Honolulu participants. Abercrombie made the decision to co-sponsor the measure after learning from Hawaii small business owners of the devastating impact of the estate tax on family-owned businesses.

Points expressed by today’s teleconference participants included the following concerns:

Small businesses are often forced to divert resources from business operations in order to pay premiums for life insurance to pay anticipated estate taxes;

Hawaii’s high real estate values often escalate estate valuations to the point where they are subject to disproportionately high estate taxes;

Small business valuations frequently reflect high concentrations of non-cash assets (such as equipment), leaving heirs short of cash to meet estate tax obligations;

The death of an owner often throws a small business into turmoil, compounding the difficulties of heirs trying to deal with estate tax obligations;

Estate tax planning frequently compels small business owners to structure their firms in ways that reduce tax liability but also reduce profits.

"The estate tax doesn’t make sense, operate fairly, or help the community," said Abercrombie. "The super-rich avoid inheritance taxes by using high-priced lawyers, accountants and financial planners to find the loopholes. But if you own a coffee shop, beauty parlor, or landscaping business, your heirs can get stuck with a huge tax bill when you die. All too often, the business has to be liquidated and the employees are in the unemployment line. Jennifer Dunn and I and others joined together in a bipartisan effort to repeal this tax and make sure that small businesses have a chance to survive, grow and remain in the hands of families who have put so much into them."

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