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Currently, the motion to permanently repeal the death tax is gaining momentum in the halls of Congress. In fact, Rep. Neugebauer (R-TX) has introduced H.R. 4746 that would prevent a series of pending tax increases while allowing the death tax to finally expire. Unfortunately, the death tax—which temporarily expired in 2010—is currently set to come roaring back in 2011. Unless we take action to fight this atrocious tax increase, individuals will be visited by the IRS and the undertaker on the same day. At first, the death tax or “estate tax” may sound like it will only affect the extremely wealthy. However, the death tax also significantly hurts families that make less than $250,000 annually.
All personal assets are counted towards the death tax including one’s house, cars, family-owned farm, farm equipment, land, 401(k) balances, jewelry, stocks, and all other personal items which can quickly add up to over a million dollars. Those who have assets valued at over one million dollars will be taxed at a rate of 55 percent upon his or her death. The death tax hurts those that have spent their lifetime working and saving in hopes of passing on the fruits of their labor to a loved one. Since all of their assets have been previously taxed, the death tax is an immoral form of double taxation.
The stories of small businessmen who will be harmed by the reinstituted death tax are heartbreaking. Since small businesses and farm owners typically do not have significant amounts of cash available, families are often forced to sell the business or farm upon a relative’s death to pay for the outrageous tax. For instance, Eugene Sukup owns Sukup Manufacturing that employs 500 people in the small town of Sheffield, Iowa. He started Sukup Manufacturing 48 years ago and wishes to pass on the business to his two sons. Sadly, the restoration of the death tax will force the company to shut down:
It will put the company out of business. That means the government is going to end up with about 60 percent of the company. They can’t afford to pay that when I pass away. You take a little town like Sheffield that has 1,000 people in it and then you’ve got 500 people looking for work? It’s going to be a terrible blow if the company would fold.
Ultimately, the death tax sends the wrong message by punishing those who have responsibly saved for the future. Repealing the death tax evidently would be one of the most effective ways to generate job growth. In fact, former CBO Director Douglas Holtz-Eakin estimates that the permanent repeal would create 1.5 million new jobs. Please join FreedomWorks in fighting to repeal the death tax that wrongly hurts small businesses and farms while punishing investment in capital.