WASHINGTON, June 19, 2013 - It’s been said that the only sure things in life are death and taxes, but many are tired of the connection between the two.
A bipartisan, bicameral group of legislators is proposing the permanent repeal of the estate tax, better known as the “death tax.” The group, led by Sen. Thune, R-S.D., and Rep. Kevin Brady, R-Texas, held a press conference today to announce their campaign for repeal along with members of the private sector.
The tax in its current state is as high as a 40 percent tax, which Thune said is bad for the economy and unfair to families who have built businesses over the course of generations. Thune also cited a Congressional Budget Office report from 2009 that showed more than one-third of family businesses who owed money due to the estate tax owed more than those businesses had available in liquid assets.
“We don’t think that’s fair,” Thune said of the statistic. “We think you ought to give family farmers and ranchers and small business people, those who work hard to build that up over a lifetime, the opportunity to pass that onto the next generation. Getting rid of the death tax once and for all would enable us to do that.”
One of the legislators on hand to speak in favor of repeal was Rep. Kristi Noem, R-S.D., who shared a personal story of how the tax affected her family’s farming operation after the passing of her father. Instead of selling family land and assets, Noem opted to take out a loan to pay the federal estate tax, a loan she spent 10 years paying off.
“[The estate tax] is one of those policies that overnight can take a family business away from a family and make sure that it doesn’t have a chance to come back or recover,” Noem said.
Thune said the proposed legislation does not yet have a Democratic co-sponsor, and admits stepping across party lines and going against the goals of the administration can be a hard thing to do. Despite the difficulty, Thune said he is hoping to find someone across the aisle to support the bill.
“There have been, in the past, members of the Senate who have been available to us on these votes, and in fact, those that have gone so far as to co-sponsor legislation,” Thune said of past bipartisan efforts in support of repeal. “We’re looking for people who are really serious about getting rid of a tax that’s really harmful to the economy and one that really does punish and is very punitive toward the entrepreneurs in this country.”
This is far from the first effort to repeal the estate tax. In December of 2010, Vice President Joe Biden and Senate Minority Leader Mitch McConnell, R-Ky., negotiated a two year extension of the Bush tax cuts that included a $5 million per person exemption lasting for two years, which was later indexed for inflation and made permanent law. Debate is now occurring about the possibility of raising the maximum tax rate from 40 to 45 percent at the backing of the Obama administration with a lowered exemption to $3.5 million.
Even though repeal of the “death tax” is an old battle, Brady said this timing for repeal is ideal.
“This is the weakest (economic) recovery since World War II, and we’re missing four million jobs and a trillion dollars out of our economy," Brady said. Eliminating the death tax could not only create jobs, but help create new federal revenue. Growth is our strongest force for balancing this budget, so in fact there has never been a better time for eliminating [the death tax] once and for all.”
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