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NTF Issue Paper: Cong8. 5-01. Dozens of American liberal zillionaires have begged Congress to delete estate and gift tax repeal from the Bush Tax Cut Plan. The cabal includes Omaha billionaire Warren Buffett and Ben & Jerry's Ice Cream co-founder Ben Cohen. About 120 of these men signed a petition that appeared in the liberal New York Times and other newspapers. No tax hits the first $675,000 of inheritance money, but beyond this figure, the tax rate ranges from 37% to 55%, hitting many Nebraskans rich in farmland, ranchland, and other rural and urban property. Richard Hunt of Blair, NE. wants to leave his Huntel Systems Inc., 8 entire businesses, to 5 sons. No repeal means selling 1 or 2 entities to pay the tax. Mediocre cattle prices worry ranchers that their children will have to liquidate their spreads to pay inheritance tax. Until one sells it, ranch or farmland is worth only what it produces. The National Federation of Independent Businesses survey shows that many sell businesses before death to pass along more $$ to heirs. Millions of business and farm owners spend much on estate planning, life insurance, and attorney fees. The tax has created a growth industry of attorneys and accountants. If you do not plan ahead, the tax cripples your heirs. If you plan ahead, you still pay exorbitant costs. A 1993 survey revealed that 9/10ths of successors whose family businesses failed with 3 yrs. after an owner death listed the death tax as a contributing factor. The Bush repeal will preserve jobs and stimulate the economy. The estate tax began in 19l6 to help us prepare for WWI. It does not contribute much to total fed revenues. Nebraskans paid $80 million in inheritance taxes. Americans paid $21.3 billion in 1998, 1.2% of total tax collections. Compliance costs eat 65c of each $ raised in revenue. The death tax hinders economic growth, because much capital formation begins through estates. More capital means more tools and higher incomes for all employees. WHAT TO DO. The House has voted to phase out this tax within 10 years. Unfortunately, liberal Rep. Doug Bereuter voted for the Democrat alternative and criticized ability of the wealthy to amass wealth, probably hard-earned, and pass it to heirs. Rep. Lee Terry called the tax a policy of confiscation. Rep. Tom Osborne decried the morality of imposing estate taxes on assets already subjected to income, capital gains, and other taxes. Urge your senators to eliminate the death tax as the Senate continues to debate the several provisions of the Bush Tax Cut Plan. Research, documentation, and analysis for this issue paper done by Doug Kagan and Steve Sfiers. This material copyrighted and notarized by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by Taxwatchers, Inc., Citizens for Local Control, Cherry County Taxpayers, Dawes County Taxpayers, and other groups in the Tax Freedom Network. 5-01. |