Family-owned businesses are the foundation of Main Street, USA. Unfortunately, our cumbersome tax code has kept too many hardworking Americans from passing down their small businesses to the next generation.
The Estate Tax, commonly known as the “Death Tax,” punishes hard-working families with a tax on their business if they try to hand it down to their sons or daughters. This tax can reach as high as 40% — an astounding amount of money. These families are faced with a fine they can’t pay and a business struggling to stay afloat — and many family-owned businesses fail, due to this estate tax.
The horror stories of this tax’s impact are found around the country — and in our own House of Representatives.
In 1939, a man started a car dealership, and built the business until his death, when he passed the family business along to his son. Because of estate tax requirements, his son nearly declared bankruptcy.
That son was Rep. Roger Williams (R-TX). His story represents the struggle many are faced with when attempting to pass their hard work down to the next generation.
Fortunately, for Rep. Williams, he was able to pull the resources together to keep his father’s dealership afloat and still runs the dealership to this day and has more than 100 employees. However, not all Americans are that lucky.
“As a business owner of many years I have seen friends and colleagues lose gains made from a lifetime of hard-work because of Washington’s failed policies, like the death tax.
“I spent two decades cutting checks to the federal government so I, and my business, could be in good legal standing. I have paid Uncle Sam money that could have gone to hiring more workers, money that could have gone to charitable causes.
“Instead, my money was transferred from my business to a bloated government that is 18 trillion dollars in debt.
“The death tax has traded job creation for bigger, less responsible government.”
Read more about Rep. Roger Williams family’s story here.
Rep. Kristi Noem (R-SD) has a similar story in a very different landscape. When her father died unexpectedly, their family farm was nearly lost because of an expensive estate tax fine.
Below, she talks about her horrific and costly experience with Greta Van Susteren on Fox News.
“My dad was killed in an accident on our family farm when I was only 21 years old and still taking college classes. We had land, we had machinery, we had cattle, but we didn’t have any money in the bank.
“Just a short time after my father was killed, we had a bill in the mail from the IRS — and it devastated us, because had to figure out how to pay it.
“Our only option was to either sell a piece of ground that had been in our family for generations, or take out a loan. We took out a loan and it took us ten years to pay off this loan.
“Our tax code should be fair… we should make it as simple as possible, yet make it work. We shouldn’t cause policy that would take away family businesses. It doesn’t matter if they have a hardware story, a family restaurant or a family farm — when they have a tragedy happen to their family and then the federal government decides they should have part of that business it’s wrong.”
House Republicans knows what we have in place right now isn’t working — and we’re going to fix it. Death should not be a taxable event. By repealing portions like the Estate Tax, we can reform our cumbersome tax code to help, not hurt, hardworking families across the country.