January 1st. It's just around the corner. And all over Georgia, individuals, families, and small businesses are anticipating the largest tax increase in American history while still trying to get by in a weak economy. And while House Republicans are fighting to extend the current tax rate so this doesn't happen, Congressional Democrats and President Obama are pushing hard for a tax increase.
The low-tax policies originally implemented in 2001 and 2003 were extended with bipartisan support in 2010, but are now set to expire December 31st. And if that happens, every American taxpayer will see their tax burden increase -- some pretty dramatically.
One of the impending taxes set to increase is the Estate Tax, commonly referred to as the Death Tax, and it has many of Georgia's small businesses and family farms very worried. In 2007, Georgia was home to over 47,847 farms generating over $69.9 billion annually to our state's economy. Many of these farms are family-owned farms. Family farms are typically asset-rich but cash-poor, meaning they will be hit hardest by going back to pre-2001 tax cuts. Under the 2001 and 2003 tax cuts, the exemption amount for the estate tax was $5.12 million with a top rate of 35%. In 2013, the exempt amount would drop to $1 million and the top rate jumps to 55%. The Third District is known and valued for its strong farming traditions, and many of your family, friends, and neighbors will be directly hurt if the current death tax rate is not renewed.
Family-run businesses will also see a huge hit if the death tax is not renewed. Many small businesses in Georgia are family-owned and family-run. They are passed down generation to generation and could bit hit by this huge increase in the death tax. At a time when unemployment remains at record highs and the economy is still struggling to recover, why would we want to increase the cost of business on small businesses who create approximately 65 percent of new private sector jobs?
And higher business costs for Georgia farmers and businesses will translate to higher prices for consumers. Allowing the death tax to jump more than 20% will force many small businesses and family farms to liquidate their assets, sell, or close their businesses just to pay off the estate tax. That means not only will they not be able to create jobs that we badly need, but we could see jobs actually lost. And while unemployment in Georgia remains right below nine percent, we all know that's the last thing we need right now.
But you don't have to just believe me. Even prominent Democrats have come out against allowing these taxes to increase. We don't need taxes to increase right now and we need to give relief to those many small businesses and family farms who are the backbone of the economy. On August 1st, the House passed H.R. 8, the Job Protection ad Recession Prevention Act of 2012 with bipartisan support. This bill would provide a one year extension of all current individual tax rates, regardless of income levels, and also extends the current death tax rate. I was a cosponsor of this bill and voted in favor of it on the House floor.
Congress has two choices: renew the current tax rate or do nothing, causing tax rates for all taxpayers to increase. Doing nothing is the worst thing we can do right now. We simply cannot afford higher taxes and more regulations. That's why I am going to continue to fight to renew all of the 2001 and 2003 tax cuts.