State\’s bicameral legislature passes a resolution urging Congress to let the Death Tax rest in peace.
WASHINGTON – On February 20, 2003, the Utah Legislature passed a joint resolution instructing its congressional delegation to eliminate the federal estate tax. The onerous tax was repealed by President Bush\’s historic 2001 tax relief plan, but due to obscure congressional rules, the tax will come back in full force in 2011.
Over the next eight years, the estate tax, more commonly known as the Death Tax, will phase out. But in 2010, the tax will return at the same level it was in 2001. At the local level, state legislatures across the nation have become increasingly vocal on the subject, making their congressional delegation aware of their stance on the Death tax.
"The Death Tax is the worst kind of double taxation," said taxpayer advocate Grover Norquist, who heads Americans for Tax Reform (ATR) in Washington. "You work your whole life, pay taxes on your earnings, pay sales taxes on the things you buy, and once you die, Big Brother Government steps in to take up to another 50%. Good thing it was ended, but now it needs to be made permanent." ATR has sponsored resolutions in 99 state legislative bodies to permanently kill the tax.
In 2002, the U.S. House of Representatives passed a bill to permanently repeal of the death tax, by a vote of 256 to 171. However, the Senate resisted the motion, and in June of 2002 voted to permanently repeal the death tax by a 54 to 44 margin, but did not achieve the necessary 3/5 vote required to wave the Congressional Budget Act with regard to Gramm Amendment 3833.
"Currently, estates are taxed at rate of over 50%, an unacceptable and confiscatory level," continued Norquist. "America\’s wealthiest people attribute only 7.5% of their wealth to inheritance, the rest is drawn from earnings."
Today, it is estimated that more than 70% of family businesses do not survive the second generation and 87% do not survive the third generation, making the Death Tax the leading cause of family businesses not surviving to the second generation. The Utah Legislature\’s joint resolution is their first warning to the Senate: Permanently repeal the death tax, because your constituents are watching.