12.31.2010 0

House Republicans Want Death Tax Back in its Grave–Permanently

  • On: 01/13/2011 09:54:36
  • In: Taxes
  • By Rebekah Rast

    If you thought discussion of the estate tax, or death tax, ended with the last Congress, think again.

    The deal on the estate tax during the lame duck session of the 111th Congress was a big compromise by both political parties. Many Republicans wanted it permanently repealed and many Democrats wanted to see a higher tax rate and a lower exemption amount.

    The estate tax compromise: A 35 percent tax rate with a $5 million exemption per person for the next two years.

    But some still aren’t satisfied with that deal.

    Representative Bob Latta (R-OH) is one Member who thinks the estate tax should be permanently repealed.

    “The estate tax is archaic and goes against the grain of hard working American families who strongly believe in a founding principle of our country that with hard work, future generations can be better off than the last,” he said in a press release.

    Because of Rep. Latta’s firm stance against reinstating the death tax, he has proposed legislation, H.R. 143, which permanently repeals the estate tax and “ensures that individuals are not taxed on the increased value of an estate by retaining the stepped-up basis at death,” according to his press release.

    His legislation would be effective for estates of decedents dying after Dec. 31, 2010.

    The truth of the estate tax is that it most often hurts farmers and ranchers. These are Americans where most of their wealth resides in their land, not in stocks, not in portfolios and not in 401ks. Rep. Latta understands that when families are hit with an IRS bill after the death of a loved one, they often don’t have the money to pay off the bill; therefore they are forced to sell their land and family business.

    “The estate tax is nothing but a form of double taxation that kills family-owned farms, ranches and other small businesses,” says Bill Wilson, president of Americans for Limited Government (ALG). “This tax needs to be eliminated so farms and businesses can stay in the family and be passed down.”

    Another Congressman who understands the devastation of the estate tax is Rep. Denny Rehberg (R-MT). In an exclusive interview with ALG, he talked about his own family’s plight with the tax.

    “As a result of that death tax we had to sell our homes, there were two on the place, my great grandparent’s and ours, our barns, our corrals—and when you sell your barns and corrals you sell your central water system—and then we also had to sell a third of the property or release the leases on a third of the property just to pay the estate tax. And then we went to the bank and borrowed money and it took us an additional 20 years to pay it all off,” Rehberg tells ALG.

    Rehberg knows he is not the only one who has suffered a tremendous loss of property due to this tax. He agrees with Rep. Latta that is not a fair tax and shouldn’t even exist.

    “It’s not a good tax policy for creating communities in America,” Rehberg says. “I’m very much against it.”

    To prevent further instances of families losing some or all of their land or having to sell off their businesses in order to pay the estate tax, Rep. Latta hope his legislation gains enough support and recognition to be passed.

    “Permanently eliminating the estate tax is an important step in ensuring that our small businesses and farmers, an integral part of our nation’s economy, can grow and prosper into future generations,” he says in his press release. “While the federal government may have taxed a portion of hard-earned American family dollars in the past, it doesn’t mean they have the right to do the same to future generations.”

    A permanent repeal of the estate tax would mean more family-owned farms and ranches lasting generations, more small businesses finding great success and more Americans attaining the American Dream.

    The government has no business robbing future generations of their inheritance. It is time for the estate tax to go back to its grave—permanently.

    Rebekah Rast is a contributing editor at Americans for Limited Government (ALG) News Bureau. You can follow her on Twitter at @RebekahRast.

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