Government Affairs

Repealing the Federal Estate Tax

Issue: One of NAA's legislative priorities in the 106th Congress is the enactment of legislation that lessens the estate tax burden on family-owned newspapers and other businesses. This issue is not only important to newspapers, it is important to our customers — newspaper advertisers.

A tax at death — especially one that raises only 1.4 percent of the federal government's total revenue should not be a factor that forces families to sell off their businesses.

Status: Even though the repeal of the federal estate tax did not cross the finish line, NAA is pleased with the progress has been made in building momentum for estate tax reform. The House and Senate passed a death tax repeal bill with strong bipartisan support and both presidential candidates have either talked about the need for reform or elimination of this devastating tax. Public sentiment for estate tax repeal grows as voters in South Dakota and Montana recently approved measures repealing their state inheritance taxes.

Key Points in Support of HR 8
· Over 70 percent of the American public believe the estate tax is unfair and should be repealed.
· The estate tax raises less than 1.5 percent of the federal budget.
· The estate tax is the most inefficient tax on the books. The government spends 65 cents of every $1 raised on enforcement and collection, and businesses spend millions on accountants and lawyers to prepare for the tax.
· HR 8 represents a compromise, as it includes the elimination of the stepped-up basis in capital gains proposed by Senate Democrats. As a result, capital gains that are not currently taxed will be taxed under the bill if and when heirs sell a business or other assets.
· Family business "carve-outs" do not solve the problem. Expanding these carve-outs would only benefit lawyers and accountants, not family businesses. Congress should end-not mend-the death tax.

Contact: Paul Boyle, Vice President/Government Affairs, phone: 202-638-4784.