No one should meet undertaker, IRS on same day
April 8, 2001
Mississippi's family businesses and farms are dying out because of the federal death tax.
The tax assessed on a deceased American can be up to 60 percent, which is making some families rethink the continuation of the family farm and family business.
That is why I voted for legislation last week in Congress titled the "Death Tax Elimination Act of 2001" (H.R. 8) providing $192 billion in tax relief by repealing the unfair death tax so that family businesses can be passed down to children and grandchildren, and family farms can continue to
survive and grow.
Fewer than half of all family-owned businesses survive the death of a founder and only about 5 percent survive to the third generation.
Under the current tax laws, it is cheaper for someone to sell a business before dying than to leave it behind to your family to pay the death tax. This is a grave injustice that punishes families for passing down a business from generation to generation.
Currently, we have budget surpluses that have led us to paying down a major portion of the national debt. If there was ever an opportunity to get rid of a tax that kills family farms and businesses, it is now. The death tax is a form of double taxation. Small business owners and family farmers pay taxes on income throughout their life. At the time of death, they are assessed another tax on their assets.
Some argue that the death tax only hurts rich people but, in reality, it harms family businesses and farmers in Mississippi and all across America regardless of age or race who accumulate assets such as property and farm equipment but do not have large sums of cash available.
Someone who died and owned three or four chicken houses in east Mississippi or a few hundred acres of timber in south Mississippi would be subject to the death tax.
It has been said that in America, one can be given a certificate at birth, a license at marriage and a bill at death. The death tax is contrary to the freedom, free-market principles, and property rights on which this nation was founded.
We should be encouraging businesses, especially small businesses, not creating obstacles for their existence and future success.
This is the core of the issue at the end of our days, Mississippians' property should be passed to their children, not confiscated by the government.
According to the National Federation of Independent Businesses, one-third of small-business owners today will have to sell all or liquidate part of their business to pay death taxes. Half of those who liquidate to pay the IRS will each have to eliminate 30 or more jobs.
The death tax brings in $23 billion in annual Revenue to the federal government but costs the private sector another $23 billion in compliance costs. That makes the total impact on our economy $46 billion.
When one calculates the amount of money spent on complying with the tax, the number of jobs lost because family businesses need to be sold to pay their death tax or the resources directed away from business expansion, it is no wonder that a groundswell has formed to eliminate this punitive tax that constitutes a mere 1.4 percent of all federal revenues.
The fact remains that no one should have to meet the undertaker and the IRS on the same day. The time is now to end, once and for all, the federal death tax. The beneficiaries will be consumers, our communities, small businesses and family farms that will not close up shop because of a tax that makes no sense.
President Bush supports our legislation to eliminate the death tax. It is my hope that the Senate will pass The Death Tax Elimination Act of 2001 soon so we may wipe this tax off the books once and for all.
U.S. Rep. Chip Pickering represents Mississippi Third Congressional District. Write to him at 427 Cannon Building, Washington, D.C. 20515 or call (202) 225-5031.