While I was in the “other Washington” recently, I learned that
Congress may actually revoke the federal estate tax this year.
The Wall Street Journal reports that House Ways and Means
Chairman Bill Archer, R-Texas, is likely to seek committee action on legislation
phasing out the so-called “Death Tax”
over the next decade — a bipartisan approach sought by Jennifer Dunn,
R-Washington, and John Tanner, D-Tennessee.
Meanwhile in the Senate, John Kyle, R-Arizona, and Bob Kerry,
D-Nebraska, managed to get 23 co-sponsors to sign onto
legislation that would immediately abolish the tax.
Family-owned businesses are the backbone of our free enterprise system.
Unfortunately, many of these families _ who pay a bevy of federal, state and local
taxes throughout their lives _ are then socked with an outrageous estate
tax when the owner dies and the business passes from one generation to the next.
In some instances, families don’t have time to plan for an orderly
transition. If the owner dies suddenly, the federal government can take
more than half of the company’s assets including land, buildings,
equipment and money _ leaving the family virtually bankrupt.
Picture a family just getting through a trying funeral, only to
be confronted with 240 pages of IRS regulations telling them how to
dismantle their business to pay Uncle Sam. In fact, in some instances,
families call their tax attorneys before they call the funeral director.
Because of this outrageous and complicated tax, 70 percent of
American families choose to cash out or abandon their businesses after just
one generation. Only 13 percent of small businesses survive into a third
generation.
Statistics show that a large number of small businesses fail on
their own _ why should the federal government be allowed to pick off the
bulk of the survivors? America’s small businesses are family-owned
businesses and they deserve a better chance to survive.
Congress should repeal the Death Tax.
Don Brunell is president of the Association of Washington
Business, Washington state’s chamber of commerce. Visit AWB on the Web
at www.awb.org.
