Printer friendly version of this page

99-203

CONTACTS:
JO-ANNE PROKOPOWICZ (202) 637-3093
DOROTHY COLEMAN (202) 637-3077

FOR IMMEDIATE RELEASE

WASHINGTON, D.C., June 16, 1999 – Appearing today before the U.S. House Committee on Ways and Means, the National Association of Manufacturers (NAM) called for the repeal of federal estate and gift taxes, also known as the death tax.

"There are few provisions in the tax code that force successful companies out of business. Few provisions tax involuntary actions or events. Yet the death tax does both. More often than not the death tax actually kills the company soon after the owner dies," said Ronald P. Sandmeyer, Jr., president and CEO of Sandmeyer Steel Company.

"Currently, there are several proposed bills that repeal the death tax. The NAM supports all of them," noted Sandmeyer. After praising Rep. Cox’s (R-CA) full-repeal bill (H.R. 86) and the phased-out approach (H.R. 8) proposed by Ways and Means members Jennifer Dunn (R-WA) and John Tanner (D-TN), Sandmeyer endorsed a new bill by Sen. Jon Kyl (R-AZ), S. 1128.

"The new Kyl Bill is so simple and fundamentally sound that I find it hard to believe someone hadn’t introduced the concept sooner. Don’t tax the transfer of a business from one generation to the next but leave the basis unchanged and tax the gain on the sale if and when it ever occurs. It repeals all death taxes and does away with the step-up in basis." Sandmeyer strongly noted, "The one caveat for support by the NAM is that we only agree with the elimination of step-up basis for inherited assets as long as it is coupled with immediate and total repeal of the death tax. The step-up basis only partially offsets a confiscatory estate-tax regime."

Sandmeyer concluded by stating, "Death, though certain, is unpredictable and involuntary. When it occurs, the money to pay the taxes is tied up in the business. A voluntary sale, on the other hand, is at a time of your choosing, and the money from the sale is on the table to pay the resulting capital gains taxes. That is why capital gains taxes don't force companies out of business but the death tax usually does."

Sandmeyer Steel Company, founded in 1952, is a third-generation family-owned business in Philadelphia, Pennsylvania. The company has 140 employees and produces steel plate products that are sold to fabricators and equipment manufacturers who make machines used in a variety of different process industries.

Be sure to visit our award-winning web site at http://www.nam.org/ for more information about legislative, policy and workplace developments affecting manufacturers, employees and the economy.