SOHO Legal -- Real People Deliver Real Reasons For Repealing The Death Tax

Real People Deliver Real Reasons For Repealing The Death Tax

WASHINGTON, DC -- (INTERNET WIRE) 5/23/00 – Family business owners from across the nation rallied in Washington for the "Death Tax Summit" and to urged Congress to repeal the federal estate tax, which they call a death tax because it prevents the natural transfer of family businesses to the next generation. At a Capitol news conference they told their stories of family tragedy and loss, and vowed to deliver their messages to Congress in person and through a national advertising campaign.

Families own nine of 10 businesses in America and spend hundreds of thousands of dollars on insurance premiums, lawyers and accountants for estate tax planning, money that could be put back into the business. With an estate tax bite as high as 55 percent, 87 percent of family businesses do not survive.

Phyllis Hill Slater, owner of Hill Slater, Inc. in Great Neck, NY, said “the public views the death tax as unfair and wrong because of three things:

1.   the 55 percent rate is the highest in our system

2.   it’s a tax at the worst time, when a death has occurred

3.   it’s a tax on assets that have been taxed at least two or three times before.”

“The government is sending the wrong message with the death tax,” added Alejandro Aguirre, deputy editor/publisher of Diario Las Americas, Miami, FL. “If you have built a business, saved for the future, put away money for your children, and achieved the American dream – in many ways – you are punished by a tax at death.”

“Whether you like it or not, estate taxes, for family businesses, become a significant part of your business plan,” said Liz Minyard, co-chairman of the board and co-chief executive officer of Minyard Food Stores, Dallas, Texas. “The problem with the estate tax is that there’s only so much you can do to lessen its impact.”

“The American Entrepreneurial spirit is the backbone of this great nation,” feels Barbara Vidmar, owner of Vidmar Motor Company, Pueblo, CO. “However, the death tax unfairly punishes your children and your employees because of the successful business you have built. I believe the spirit exhibited by dealers and other small business entrepreneurs should be encouraged, not penalized.”

"Because of the death tax, my family is forced to choose the lesser of two evils: either pay $36,000 a year in life-insurance premiums, or eventually face selling our business," said Brad Eiffert of Boone County Lumber in Columbia, Missouri. "Selling the business will remove 40 jobs from our community and kill a valuable source of income tax, sales tax and property tax. It doesn't make any sense, and I hope something can be done before it's too late for many businesses."

“It is time to fully repeal the inheritance tax,” Maryland Delegate Obie Patterson said. “This tax forces many businesses out of local communities and consequently reduces our labor force and revenue.” Patterson was the author of the recent death tax repeal law in Maryland and attended the Summit to encourage bi-partisan congressional support for repeal.

"Twenty-five years ago, women were given access to business loans and now are struggling to pass their life's work to their children. According to a recent study, women employers spend an average of $1,000 a month on estate planning attorneys and life insurance policies to prepare for the death tax – just to keep the family business in the family. With 44 million Americans without health insurance, a majority of them working for small-business owners, that's money that employers would like to use to pay for health insurance for employees," said Congresswoman Jennifer Dunn (R-WA).

"When the estate tax was enacted, the exemption in today's dollars was valued at $9 million," said U.S. Representative John Tanner (D-TN). "Today, the exemption is $675,000 and won't reach $1 million until 2006. Roughly 70 percent of small businesses and family farms don't survive to a second generation, and 87 percent won't survive to a third generation. That is wrong. In my view, there is a societal value in the generational transfer of small businesses and family farms which we seek to promote and protect. It should not be the policy of this nation to penalize such action."

Hundreds of family business owners gathered in Washington for the day long Death Tax Summit which began with briefings on new research supporting the repeal of the estate tax and presentations from members of Congress. Also, in coordination with the Summit, a nationwide advertising campaign was announced to raise awareness about this issue.

The Summit is sponsored by a coalition of independent business owners and national organizations opposed to the death tax. Participants in the event included HR 8 (repeal bill) sponsors U.S. Representatives Jennifer Dunn (R-WA) and John Tanner (D-TN), U.S. Representative Neil Abercrombie (D-HI), Maryland Delegate Obie Patterson (D-District 26), sponsor of the Maryland repeal law, and more than 100 business owners and their children.

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