Americans for Tax Reform, an organization devoted to opposing any federal or state efforts to increase income taxes on individuals and businesses, and the American Family Business Institute (AFBI), a trade association representing family business owners and farmers, today sent a letter to the Indiana State Senate and House of Representatives urging them to support State Senator Jim Banks’ pending legislation to phase out Indiana’s death tax.
The letter states, “This must be a priority next year. This is a punitive tax on hardworking Hoosiers that ultimately drives them out of state. Indiana should join the number of states who have taken recent action to phase out this economically destructive tax.”
The complete text of the letter reads:
December 12, 2011
Indiana House of Representatives
We write in support of Sen. Jim Banks’ pending legislation to phase out Indiana’s death tax. This must be a priority next year. This is a punitive tax on hardworking Hoosiers that ultimately drives them out of state. Indiana should join the number of states who have taken recent action to phase out this economically destructive tax.
Indiana’s death tax is complex and compliance is onerous. But most importantly, it punishes the very ideas of hard work, job creation and savings. Those who pull themselves out of poverty by creating a small business are robbed by their government posthumously as they seek to pass on the fruits of their labors to their descendants. Family farmers are punished as they pass along land and equipment to the next generation. And citizens who pay taxes on income, sales and property their entire lives are hit with yet another layer of taxation after passing away.
There is a burgeoning national trend to do away with death taxes at the state level. Most recently, neighboring Ohio voted to scrap the tax. While Indiana has prided itself on its ability to compete with the rest of the Midwest due to a favorable business climate, the opposition is stiffening. Governors across the region were elected in 2010 with the mandate to reduce the size of government and improve states’ tax climates.
In Maine, Gov. Paul LePage signed a bill to double the estate tax exemption, while efforts to increase the tax failed recently in North Carolina and Oregon. Indiana should act now or risk erosion of the state’s comparative advantage.
21 states and Washington D.C. still levy either an estate or inheritance tax. Those who do not are a magnet for job creation and economic growth. We urge Indiana to join the growing coalition of states who have recognized the negative impact of the death tax and its barriers to productivity and growth.
President, Americans for Tax Reform
President, American Family Business Institute
CC: Governor Mitch Daniels