The U.S. House of Representatives will vote this week on a bill that would permanently extend the estate tax (known better as the death tax) at its current rate and exemption level. This extension would prevent the death tax from expiring as scheduled on January 1, 2010. As such it would be a significant tax increase.
Before voting to extend the death tax, Congress should consider the devastating impact it has on family-owned businesses. Reliable Contracting, a family-owned business in Millersville, Maryland, for example, had to pay a death tax liability over a ten year period. During that decade span, the money they had to dedicate to pay the tax greatly weakened the business and it struggled to survive. As the video below shows, if the death tax hit Reliable once more the business might not make it through the ordeal again:
[youtube]http://www.youtube.com/watch?v=ImxWWLEcMiI[/youtube]
Increasing the death tax would be a severe blow to Reliable Contracting and other family-owned businesses. Instead of passing a punishing tax increase, now is the time for Congress to repeal the death tax forever. Doing so would lift a tremendous burden from countless family-owned businesses across the U.S. And it would create millions of new jobs. The death tax is an enormous drag on the economy because it discourages hard work, saving and investing. Lifting impediments to these economy growing activities would put millions of unemployed Americans back to work.
As the debate over the death tax continues, you can view more videos on the tax’s devastating impact on family-owned businesses and read all of the Heritage Foundation’s research on the topic at our new rapid response page www.heritage.org/deathtax.