ATR joined with the American Family Business Institute recently to send a joint letter to Congress. It can be summarized as follows: the death tax should stay dead as part of any prevention of the January 2011 tax hikes. This letter was signed by 39 prominent free market organizations and tea party groups.
November 16, 2010
Open Letter to the United States House of Representatives and United States Senate
Extend Death Tax Repeal with 2001 Tax Relief Extension
Dear Senator/House Member:
The undersigned organizations urge Congress to act now to prevent the historic 55% hike in the death tax by keeping it at its current resting place of 0%. We encourage you to extend the repeal of the death tax within any extension of the Bush tax cuts to provide relief and certainty to America’s family businesses and farms.
The estate tax has been hastily dealt with under the 111th Congress creating planning problems for family businesses and farms hoping to pass their business on to the next generation. Because no action has taken place this year, the tax is scheduled to swing from its current and proper rate of 0% to a confiscatory 55% on January 1, 2011.
Congress’ inability to establish a sensible estate tax policy has added to the already uncertain and volatile economic environment America’s family businesses and farms now face. With the myriad of estate tax proposals on the table and short amount of time to act in this lame duck session, we encourage you to extend estate tax repeal for family businesses and farms through next year when a new Congress can decide
on a more sensible, permanent estate tax solution.
Estate tax repeal was passed in 2001 under the Economic Growth Tax Relief Reconciliation Act tax cuts and so should be included in any of the tax extension bills currently being considered. The Wall Street Journal, Forbes, and other major media outlets are reporting on a new surge in calls for death tax repeal. Indeed, this election season, over 500 Democratic and Republican candidates, 129 of which were elected to the 112th Congress, signed a pledge to permanently repeal this hated and economically destructive tax.
We support repeal of the death tax for the following reasons:
Repealing the death tax would spur job creation. According to a recent study by Douglas Holtz-Eakin, Ph.D, repealing the death tax would create 1.5 million additional small business jobs. It would shave almost a percentage point off the unemployment rate.
The death tax promotes the concentration of wealth. Joseph Stiglitz, one of President Clinton’s economic advisors, has argued that the death tax “may actually increase inequality.” This argument is backed up by economist Antony Davies, Ph.D, who found that the average annual increase in the death tax burden has resulted in an additional 6,000 small businesses being eliminated or absorbed into large businesses.
The death tax falls particularly hard on minorities. African-Americans have just in the last generation started accumulating generational capital, but the death tax threatens to confiscate it. Death tax liabilities bankrupted the Chicago Daily Defender – the oldest black-owned daily newspaper in the United States and will reduce net African-American wealth by 13%, according to a study conducted by Boston College professors John Haven and Paul Schervish. 50% of Hispanic business owners know someone who sold their business to pay the estate tax and a quarter expect to sell their business because of the estate tax, according to a 2004 Impacto Group poll.
The death tax contributes a very small portion of federal revenues. According to the Office of Management and Budget, the death tax only collected 6/10 of one percent of all federal tax revenues in FY 2009. There is a good argument, in fact, that not collecting the death tax would lead to higher economic growth and thereby increased federal revenue from other taxes.
A supermajority of likely voters support killing the death tax. Poll after poll has indicated that a super-majority of likely voters support killing the death tax. Typically, two-thirds of likely voters support full and permanent repeal of the death tax (even though far less than one percent of voters will ever be liable to pay it). People instinctively know that the death tax is not fair.
The death tax is immoral and cruel. It makes no sense to require grieving families to pay a confiscatory tax on their loved one’s nest egg. Often, this tax is paid by selling family assets like farms and businesses. Other times, employees of the family business must be laid off and payrolls slashed. No one should be punished for working hard, practicing thrift, and leaving an inheritance to future generations.
We encourage you to support legislation that will keep the death tax at rest.
American Family Business Institute
Americans for Tax Reform
Heritage Action for America
Americans for Prosperity
Morton C. Blackwell
Conservative Leadership PAC
National Black Chamber of Commerce
Club for Growth
60 Plus Association
Colin A. Hanna
Let Freedom Ring
David A. Keene
American Conservative Union
National Taxpayers Union
Mario H. Lopez
Hispanic Leadership Fund
Concerned Women for America
Director, Center for Investors and Entrepreneurs
Competitive Enterprise Institute
Stephen J. Entin
President and Executive Director
Institute for Research on the Economics of Taxation
C. Preston Noell, III
Tradition, Family, Property Inc.
William Greene, Ph.D.
Traditional Values Coalition
The O’Leary Report
National Tax Limitation Committee
American Grassroots Coalition
Sr. Vice President
Family Research Council Action
NationalCenterfor Public Policy Research
Center for Urban Renewal and Education
Tea Party WDC
Dr. Richard Land
Southern Baptist Ethics & Religious Liberty Commission
Campaign for Liberty
Young Americans for Freedom
Senior Vice President
Vice President of Legal and Public Affairs
Center for Individual Freedom
Mandi D. Campbell, Esq.
LibertyCenterfor Law and Policy
National Federation of Republican Women
William J. Murray
Religious Freedom Coalition
Richard A. Viguerie
Congressional Affairs Director
Republican Jewish Coalition
Citizens Against Government Waste