Benjamin Franklin was one of the most brilliant men in American history. One of his most famous quotes was, “but in the world nothing can be said to be certain except death and taxes.”
For a number of years, our federal government combined the two certainties by taxing a person’s estate when they die. Today, President Barack Obama and his fellow Democrats want to increase the Estate Tax also known as the Death Tax.
Under George W Bush, the Death Tax was gradually reduced until it reached 0% in 2010. Prior to the 2010 elections, the Democratically controlled House and Senate refused to take up measures to maintain the 0% Death Tax rate. Their failure to act allowed the rates to jump back up to 35% of estates worth $5 million or more. In 2013, the Death Tax rates are scheduled to jump to 55% for any estates worth $1 or more.
When you add this to Obama’s proposed Buffett Rule that would require anyone making $1 million a year or more to pay 30% in income taxes, you soon realize that many small businesses will no longer be able to survive because the owners will be heavily taxed when alive and even more heavily taxed when they die. The financial burden will be too great for many small businesses forcing them to either lay off workers or close their doors permanently.
One of the campaign promises made by a number of new Republican candidates made in 2010 was to completely repeal the Death Tax and allow families to keep their hard earned legacies. To date, the more senior GOP House members have not jumped on the Death Tax bandwagon, much to the dismay of the freshmen class.
President of the GOP freshmen class, Rep Austin Scott, at the urging of the rest of the freshmen group, has written an open letter to House Speaker John Boehner stating they,
“are eager to present a clear cut choice to voters: Support the Republican plan to bury the death tax or support Democrats’ plan to hike the death tax to a crushing 45 percent rate, or higher.”
First introduced in 2011 by Rep Kevin Brady, The Death Tax Repeal Permanency Act has 206 House cosponsors, four of which are Democrats. With this kind of support, the GOP freshmen are confident the measure will pass the House.
On the Senate side, a similar bill, presented by Sen John Thune has gained 36 cosponsors where it needs only 51 votes to pass. However, since the Democrats still control the Senate numbers, it is questionable if the Death Tax repeal will be passed.
While many of us do not have fortunes amounting to $1million, the Death Tax could still very much affect you and your loved ones when you or they die. If you value what little property and assets you have built up and want to see that all of it is left to those whom you choose, then please contact your Representative and Senator and urge them to vote for the Death Tax repeal.