Government Affairs

Facts About the Death Tax

• With rates ranging from 37 to 55 percent, the burden of estate taxes is one of the largest challenges facing family-owned businesses.

• The estate tax was permanently established in 1916 to break-up a concentration of wealth in this country. However, today, it is breaking-up family businesses and preventing the transfer of businesses from one generation to another. This is why HR 8 is supported by over 100 national business organizations, including, the National Black Chamber of Commerce, the U.S. Hispanic Chamber of Commerce and the National Association of Women Business Owners.

• A tax at death should not be a factor in a decision to sell a business that a family has worked hard to build, especially since the estate tax:

1. Is assessed on business and personal income that has already been taxed once and sometimes twice (capital gains);

2. It brings in less than 2% of total federal revenues;

3. It costs the federal government 65 cents of every dollar raised for administrative and litigation costs associated with enforcement.

• Family businesses could better use their resources to modernize equipment, expand operations and create new jobs, rather then spend hundreds of thousands of dollars for lawyers, accountants and insurance to avoid the estate tax.

• The legislation is fair and reasonable. When the death tax is repealed in 2010, the heirs who inherit a business, property and other assets, pay capital gains taxes when those inherited assets are sold.