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Dennis S. Day: (202) 383-2710
Phil Thoden: (202) 383-2764

DEATH TAX IS MOST ONEROUS BURDEN FACING FAMILY-OWNED CONSTRUCTION COMPANIES

Washington, D.C. – It is imperative that the 106^th Congress pass legislation to eliminate the "Death" tax. That is the message the Associated General Contractors of America (AGC) is sending Congress today as it joined Representatives Jennifer Dunn (R-Wash.) and John Tanner (D-Tenn.) who introduced legislation (H.R. 8) to eliminate the estate (death) tax.

"The death tax is the most onerous burden facing family-owned construction companies," said AGC President Peter K.W. Wert. Wert added, "The elimination of the death tax is AGC’s number one legislative priority for the 106^th Congress and AGC strongly supports the Dunn/Tanner bill to eliminate the death tax over a 10-year period."

Among AGC members, according to an AGC/Deloitte and Touche survey, 94% are closely-held and 81% are owned by fewer than four persons. In the capital intensive construction industry, even the smallest contractor has lifetime capital assets, property and real estate over $650,000, the current estate tax credit amount. The burden of the federal estate tax falls squarely on AGC’s smallest family-owned construction firms.

Wert said, "When faced with the death tax (at a rate of 37% to 55% on top of income taxes paid on earnings, capital gains, dividends and interest) many family-owned construction companies businesses must be sold, downsized or liquidated just to pay the tax," added Wert.

AGC member Richard Forrestel, Jr. of Cold Spring Construction in Akron, New York who testified before the 105^th Congress said, "Unfortunately, more than 70% of family businesses do not succeed to the second generation and 87% do not survive to the third generation. Furthermore, it is estimated that 90% of family businesses that fail shortly after the death of the founder fail because of the estate tax burden placed on family members. In a recent survey, 62% of AGC's membership said that the federal estate tax will make it significantly more difficult for the business to survive the death of the principle owner."

Under the Dunn/Tanner bill (H.R. 8), estate and gift tax rates would be reduced by 5 percent per calendar year until both taxes are completely eliminated. Senator Ben Campbell (R-Colo.) has introduced similar legislation (S. 38) in the Senate.

The Associated General Contractors of America is the nation’s largest and oldest construction trade association, founded in 1918. AGC represents more than 33,000 firms, including 7,500 of America’s leading general contractors, and 12,000 specialty-contracting firms. Over 14,000 service providers and suppliers are also associated with AGC, through a nationwide network of chapters.

http://www.agc.org/   dayd@agc.org

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