Home

June 27, 2000

Congressman Neil Abercrombie joined a bipartisan group of House colleagues at a Washington, DC, news conference today urging the Senate to repeal the estate tax.

Abercrombie was a co-sponsor of H.R. 8, a bill to repeal the tax, which passed the House of Representatives June 9 on an overwhelming two-thirds vote.

"Those of us who helped move the estate tax repeal through the House received a tremendous amount of positive feedback from small businesses at home, and I’m sure the Senators will get the same kind of response when they pass this bill," said Abercrombie.

On June 20, Abercrombie conducted a video teleconference with small business owners in Hawaii, who expressed strong support for the repeal.

The teleconference participants expressed a number of frustrations with the estate tax, including 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 or operate fairly," 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 hit 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. Repealing the estate tax will give small businesses a chance to survive, grow and remain in the hands of families who have put so much into them."

-30-