“Just as troubling,” Hammonds said, “is the fact many family businesses are now subject to higher estate taxes in nearly half the U.S. states, where the federal and state inheritance levies are interlinked.” The credit for state inheritance taxes on federal returns is declining and will become a deduction in 2005. At the same time, states are increasing their inheritance taxes.
“The only solution is to kill the federal death tax once and for all,” he said. “It is unfair — a belief reaffirmed by nine in 10 voters in poll after poll. It impedes job and economic growth, forcing family business to spend exorbitant amounts for estate planning and costly life insurance to help pay the estate tax bill.
“The death tax threatens business survival, presenting owners with the grim choice to either sell the family company before they die or pass it along to their children with tax liabilities that severely inhibit the opportunity to succeed in today’s hyper-competitive marketplace.
“We applaud the House leadership for recognizing the need to repeal this tax permanently. And we strongly urge the Senate to do likewise, so President Bush can sign this much needed tax relief into law.”