Before being elected to Congress, I owned and operated a small independent insurance agency for twenty years. I was also fortunate enough to spend a number of years operating a small cattle farm with my grandfather. Through both of these experiences, I've seen firsthand how the tax code can make or break a small business or a family farm. In particular, the death tax is one part of our tax code that is very harmful to these family businesses and farms. Small businesses are the backbone of our economy, providing almost 57% of our private sector jobs. Families across Georgia work from generation to generation to maintain small farms and businesses that strengthen both their finances and their family bonds. Often, the death tax forces families to pay their tax bill by selling vital equipment, laying off loyal employees or selling the farm or business entirely. Instead of incentivizing citizens to pursue the American dream, the threat of this tax crushes it. Permanently repealing the death tax will turn the tide on this problem and begin adding jobs back to the most productive sector of our economy.
From 2001 to 2010 the death tax was gradually lowered from 55% to 0%. In 2010, family businesses experienced a 0% death tax thanks to a law passed by Republicans and signed by President Bush. Unfortunately, when that provision expired last year, Democrats let the rate skyrocket back to 35% and America's family businesses and farmers were hit with the increased tax at the start of 2011. If Democrats have their way, we will see the death tax increased to 55% by the year 2013. This increase makes passing a family farm or business to the second generation even more difficult. As it stands, more than 70% of family businesses do not survive to the second generation and a full 90% of family businesses do not make it to the third. At a time when family businesses are struggling, family farms continue to liquidate, and even more jobs are at stake, our American businesses simply cannot afford this tax increase and they certainly do not deserve it.
I am a proud cosponsor of H.R. 1259, The Death Tax Repeal Permanency Act of 2011, which aims to help bring relief to small business owners and farmers in Georgia and across America. This bill will amend the Internal Revenue Code to permanently end the death tax, maximize the gift tax rate at 35%, and permanently repeal the generation-skipping tax. In spite of our struggling economy, the American dream is still alive and well. We must not kill it with this debilitating tax. I hope you will join me in my support of repealing the death tax.
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